Markets & Finance

UBS Warburg Downgrades Coors to 'Hold'

UBS Warburg downgraded Adolph Coors (RKY) to hold from buy.

Analyst Caroline Levy cites distributor conversations suggesting continuing sales weakness in the U.S., and a substantial increase in marketing and promotional spending in 2003. With the stock well up from recent lows, Levy says she thinks a high projected cost savings in the U.S. and United Kingdom have largely been discounted.

Levy maintains her $4.65 2002 earnings per share estimate, but trimmed the $5.10 2003 earnings per share estimate to $5.00, reflecting higher forecasted marketing and promotional spending in the U.S., as well as lower projected 2003 U.S. volume (sales-to-retail) and lower pricing growth.

She thinks volume and pricing in the United Kingdom will be challenged due to tough comps-store sales. She cut her $82 target to $68.

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