The move into seltzer will continue to pay off for Boston Beer and its investors, according to Credit Suisse. Analyst Kaumil Gajrawala upgraded the stock to outperform from neutral, saying in a note to clients on Wednesday that the Truly hard seltzer brand is gaining steam even as the industry matures. "The category is slowing. But excluding declines at share leader White Claw, the category is growing triple digits. Truly contributed +6pp to industry growth of +5pp in May '21. The brand is closing the gap with White Claw on velocities and share as well," the note said. Credit Suisse also said the concern about seltzer eating away at Boston Beer's traditional brands is overblown. "There is too much focus on how large seltzer can be as a percentage of US beer. We think that is wrong metric given that 50% of share is gained from wine and spirits. We think seltzer could reach 10% of total beverage alcohol by 2025 (3.5% today), approaching the size of wine," the note said. Credit Suisse hiked its price target to $1,490 per share from $1,304. The new target is roughly 61% above where the stock closed on Tuesday. —CNBC's Michael Bloom contributed to this report.
Jim Koch, founder of Boston Beer
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The move into seltzer will continue to pay off for Boston Beer and its investors, according to Credit Suisse.