EW With Continued Industry and Portfolio Volume Headwinds

Research evidence excerpt

EW With Continued Industry and Portfolio Volume Headwinds

quality. We remain EW, with structural framework

** = Based on consensus methodology

pressures on alcohol consumption in the US from demographics, health & wellness § = Consensus data is provided by Refinitiv Estimates

e = Morgan Stanley Research estimates

trends, and cannabis substitution, and SAM's challenged brand portfolio, but a

Quarterly EPS ($)

balanced risk/reward for the stock from here following recent underperformance. 2026e 2026e 2027e 2027e

Post 2Q, we are lowering FY26/27 EPS by -4%/-6.5% to reflect softer volumes only Quarter 2025 Prior Current Prior Current

Q1 2.16 - 1.64a 1.91 1.90

partially offset by lower A&P spending, and are lowering our PT to $190 from $220. Q2 5.45 4.97 3.65 5.60 4.16

Q3 4.25 4.45 4.34 5.02 4.69

SAM Portfolio Lagging the Weak Alcohol Industry: SAM's portfolio also continues Q4 (2.12) (1.74) (0.63) (1.50) (0.42)

to underperform the weak beverage alcohol industry with persistent declines for e = Morgan Stanley Research estimates, a = Actual Company reported data

Twisted Tea and Truly Hard Seltzer more than offsetting growth for Sun Cruiser

vodka tea. While management noted that it grew combined revenue for Twisted Tea

and Sun Cruiser, we believe that volume trends could actually worsen from here as

Sun Cruiser matures. Although Sun Cruiser continues to grow close to triple digits

recently, comparisons get more challenging for the balance of the year as it cycles

last year's national rollout, and we expect growth to moderate further in 2027.

SAM's efforts to improve Twisted performance through innovation, marketing,

pricing, and pack architecture have yet to turn the brand amid share of display and

consumption growth for spirits-based RTDs, and we don't expect a snap-back in