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UBS Raises Adolph Coors to Buy


UBS Warburg upgraded Adolph Coors (RKY) to buy from neutral.

On Thursday the beer maker posted 63 cents fourth quarter operating earnings per share. Analyst Caroline Levy says the risk/reward is attractive at current levels, especially given the 10% free cash flow yield. She notes earnings per share flexibility as a result of an aggressive cost-efficiency drive, which should save the company $1.50 per share annually over the next five years.

Levy cut her $5.00 2003 earnings per share estimate to $4.80, and sees $5.40 for 2004. She thinks tough weather comparisons in the fourth quarter of 2002 and the first quarter of 2003 could keep the stock soft in the very near-term, but she adds that Coors has a lot of factors to accelerate its revenue growth by the second quarter, especially in the second half of the year.

Levy also cut her $68 target to $61 to reflect slower-than-expected 2003 growth.


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