UBS Warburg Hikes Coors Rating
UBS Warburg upgraded its investment recommendation on Adolph Coors (RKY ) to buy from reduce.
Analyst Caroline Levy says she expects over $1.00 per share in cost savings from U.S. efficiency initiatives by 2006. She notes cost savings will allow Coors to reaccelerate investments in brand support. Levy says spending behind improved ads should rise 3%-5% in 2002, giving better visibility on her modest 2% volume growth estimate. While the consensus view on the company's Carling acquisition is negative, she believes it will be accretive to margins and EPS, and carries less risk than currently perceived. The analyst raised her $2.72 2002 EPS estimate to $3.63 and her $2.96 forecast for 2003 to $4.00. She has a $63 price target.
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