Summer may be over but popularity of White Claw and Boston Beer's Truly spiked seltzer is still raging, according to Guggenheim.
The firm reiterated its buy rating on Boston Beer's stock and raised its price target to $462 from $449 per share, citing Truly's rapid sales growth.
"Truly and Claw are now the law," Guggenheim analyst Laurent Grandet said in a note to clients Monday. "Truly is far outpacing our estimates with additional room to run next year, even as White Claw remains the category leader."
Shares of Boston Beer have risen 45% this year as the spiked seltzer category has expanded 200%. Boston Beer's Truly and the private Mark Anthony Brand's White Claw hold 85% share of the hard seltzer category, despite the number of competitors almost doubling, said Grandet. While White Claw is still the category leader, Truly is beating Guggenheim's growth estimates with no signs of slowing down, the analyst said.
Given the strength of the brand, Guggenheim raised its 2019, 2020 and 2021 earnings estimates for Boston Beer, despite slumping sales of Samuel Adams.
The firm also raised its third quarter earnings per share estimate to $3.27 from $2.87 for Boston Beer.
"We continue to think management's FY19 guidance is conservative, and we expect another "beat and raise" quarter when the company reports 3Q results," said Grandet.
Shares of Boston Beer rose 2.9% on Monday.
— With reporting from CNBC's Michael Bloom.