4. Molson Coors (TAP): Overview
Despite low single-digit volume decline (worldwide beer consumption down), current price reflects an overreaction to book value.
Growing profitable product mix and overall market share, TAP’s price currently offers an attractive entry point.
Earnings Call, TAP misses guidance – one time headwinds: European tax hit, new systems integration.
TAP vs BUD
* Despite larger volume declines, BUD has not seen the same price erosion.

5. Molson Coors (TAP): Absolute Valuation
Layering in tepid growth expectations (1-2%) and 50% achievement of cost synergies, creates a base case and estimated value of $87.57↑up from $69.82, offering strong BUY potential with 25% upside.
Current Price $
Monday, July 9th 2018
Implied equity value/share $
Upside/(Downside) to DCF
25.4%
Reflect values close to current price $
< Current Value $ 8%
8.5%
9.0%
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10.0%
10.5%
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11.5%
13%
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6. Molson Coors (TAP): Relative Valuation
* TAP (which historical trades at ≈ 18x PE), is trading well below competition on a relative basis.

7. Molson Coors (TAP): Key Takeaways
Above premium sales continue strong growth rates, which partially help to offset volume loss (product mix), demanding higher prices – volumes should stabilize regardless.
Molson Coors maintains its 2018 guidance for growth and $210M in annual cost synergies over the next 3 years.
Molson Coors is engaged in discussions to acquire/partner with cannabis companies in Canada and has recently acquired Kombucha to add non-alcoholic products to its offering.
Molson Coors has come up just short as of late against its guidance. Much of this has been the result of an effort to clean up its balance sheet and drive down debt from its 2016 acquisition of Miller Coors (≈$12B)
Molson Coors completed its acquisition of Miller Coors adding significant scale and valuable brands.
People will always drink beer – this is supported by 10,000’s of year of human history – in other words, downside minimal, upside large.

8. Kroger (KR) Rating: Sell Target: $27.50 Current: $29.33 Downside: 6%
Amazon announces Whole Foods purchase
Rating: Sell
Target: $27.50
Current: $29.33
Downside: 6%

9. Kroger (KR) Amazon reaction was overblown – but disruption looms
Hard-discounters (Walmart, Target, Costco) have product diversification advantage
“Restock Kroger” - expensive initiative to maintain current market share; little growth

10. Kroger (KR) Kroger’s story: margins
Inflation concerns – can’t pass costs onto consumers
Extreme industry competition
Increasing capex to respond to online shopping threats

11. Walmart (WMT) Walmart’s Business Segments
Walmart started out small, with a single discount store and the idea of selling more for less. Over the last 50 years it has seen itself grow into the largest retailer in the world. Approximately 270 million customers visit over 11,000 of their stores, worldwide, every week. It employs over 2.3 million people all over the world and they continue to be a leader in sustainability, corporate philanthropy and employment opportunity.
Walmart’s Business Segments
Annual Net Sales Worldwide :

12. 10 year performance compared to S&P 500
Walmart (WMT)
10 year performance
10 year performance compared to S&P 500

13. Walmart (WMT) Recommendation: Rating: BUY Current Share Price: $84.41
Target Share Price: $99.42
Upside: 17.8%
Risks:
Walmart could face stiff competition from discounters like Aldi’s and also from other stores such as Kroger.
On the e-commerce front, Walmart faces strong competition from Amazon, especially after Amazon’s acquisition of Whole Foods
Due to its global presence, the company is exposed to risks such as foreign currency movements, politics, trade wars and so on.

15. To Consider: PepsiCo, Inc.
This company outperformed the S&P 500 during the ‘08 financial crisis.
It had a dividend yield of 3.39%
Currently trading 12% below its 52 week high

16. To Consider: Colgate - Palmolive
Lot of discussion around startups selling direct to consumer brushes and toothpaste; none profitable
12% under historical P/E, 16% off 52-week high

17. To Consider: Proctor & Gamble
Strategic brand consolidation positions PG well for volume growth and cost synergies.
Trading at ≈ $78, 3.62% Forward Dividend Yield. Estimated value $91.88 ↑, which creates a potential for ≈ 18% upside.
Current Price $
Monday, July 9th 2018
Implied equity value/share $
Upside/(Downside) to DCF
17.6%