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"Molson Coors Brewing Company (NYSE:TAP) is a way to drink your way to profits," jests Jonas Elmerraji. In The Rhino Report, the advisor suggests that the brewer is well-positioned to benefit as consumer scale down from more expensive beer brands. Here's his review.

"The stock price of TAP has slid in price in recent months, largely the result of underwhelming Wall Street in its latest earnings release a month ago.

Molson Coors Brewing (TAP) appears to be undervalued.  Issues with high ingredient costs and the downward movement of the market helped to temporarily bring this stock lower as well.  However sales of Coors light have helped by outperforming the overall beer market growth.  Barron's is reporting that this stock "could climb more than 50 percent to around $60 over the next year"

TAP is undervalued, looking only at valuation relative to its Industry average valuations.

* TAP has a Projected P/E of 12.30
* TAP's Industry (Beverages - Brewers) has an average Projected P/E of 15.86
* Implies a Projected Stock Price of $59.79

* TAP has a projected earnings growth rate of 9.25%
* TAP has a PEG of 1.33
* TAP's Industry (Beverages - Brewers) has an average Projected PEG of 1.52
* Implies a Projected Stock Price of $53.01

Source of the analysis and calculations:

Despite the economic slowdown, or perhaps due to the pressures on beer drinkers from the slowdown, Molson Coors (TAP) reported better than expected sales and earnings for the recent quarter and the stock foamed up over 8%. TAP has been a position of mine for several months, up over 25% before the pop.<!--more--> The stock has appeared cheap relative to earnings and sales, had a nice pattern of improving earnings estimates from Wall Street and few short sellers willing to bet against it - and the news proved they were right to be cautious.

Despite the economic slowdown, or perhaps due to the pressures on beer drinkers from the slowdown, Molson Coors (TAP) reported better than expected sales and earnings for the recent quarter and the stock foamed up over 8%. TAP has been a position of mine for several months, up over 25% before the pop.<!--more--> The stock has appeared cheap relative to earnings and sales, had a nice pattern of improving earnings estimates from Wall Street and few short sellers willing to bet against it - and the news proved they were right to be cautious.