A rough second quarter has put the bull case for Boston Beer in serious doubt, and the stock should fall, according to Goldman Sachs. The parent company of Samuel Adams beer reported second-quarter earnings on Thursday of $4.75 per share on $603 million in revenue. Analysts surveyed by Refinitiv were looking for $6.69 in earnings per share and $658 million in revenue. Sales of Truly brand hard seltzer were lower than expected as alcohol consumers shifted back to bars. The miss earned a quick downgrade from Goldman Sachs analyst Bonnie Herzog, who knocked the stock to neutral from buy on Thursday night. "We are very surprised by the magnitude of this quarter's miss which came in well below expectations despite [management]'s consistently confident tone as recently as our May 18 Global Staples Forum," Goldman said in a note to clients. Some slowdown in the hard seltzer category was expected, but the miss in the second quarter raises questions about Boston Beer's long-term growth plans and ability to properly forecast its results, Goldman said. "[Management] has low visibility in its own business — SAM has less visibility into the category (and is no longer forecasting this) as well as its own business which is in contrast to its own commentary as recently as May," the note said. Goldman slashed its price target on Boston Beer to $875 per share from $1,550. The new target represents downside of about 7.7% from where the stock closed Thursday. -CNBC's Michael Bloom contributed to this report.
Jim Koch, founder of Boston Beer
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A rough second quarter has put the bull case for Boston Beer in serious doubt, and the stock should fall, according to Goldman Sachs.