While the tech selloff has dominated headlines, growth stocks of all kinds have taken a beating lately. That’s a buying opportunity in the beverage space, Goldman Sachs says.
She has a $275 price target on Constellation Brands, which she also added to the firm’s Conviction Buy List last month. The market is under appreciating momentum in the company’s Modelo brand, as well as its ability to quickly scale its Corona Hard Seltzer as it doubles capacity this year, she says. As for Boston Beer, the company’s first-mover advantage in the hard seltzer category—“one of the few big growth opportunities in alcoholic beverages”—is both “sustainable and broadly defensible,” even with new competition, Herzog writes. The company’s Truly brand looks poised to capture much of the hard seltzer category’s strong momentum this year, she adds.
Herzog has a $107 price target on Monster stock. The company has seen strong sales trends year to date, and sales could ultimately climb more than 20% for the first quarter as a whole—a possibility that the stock doesn’t seem to be reflecting, she writes.
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