Bank of America Merrill Lynch Reports on Molson Coors

Bank of America Merrill Lynch commented on Molson Coors TAP in a report released yesterday. In the report, Bank of America Merrill Lynch was mixed in its assessment of the company. Bank of America Merrill Lynch writes, "Our Neutral stance towards the stock has been centered around challenging beer trends in its three key markets, rising input costs, uncertain category price trends in its key market (Canada), the potential for M&A or heightened investment overseas along with potentially limited returns to shareholders (i.e. no share buy backs despite strong free cash flows). (Data released for April today, for US tax paid category beer volumes, show April at -3.4% which was the lowest monthly performance so far this year, and YTD vols were -1.4%.) While expected, today's dividend announcement is positive for shareholder returns, and follows a 17% dividend boost in 2010 and a 20% increase in 2009. The dividend increase of 14% far exceeds our forecasted EPS growth in 2011 (of +2%), though reflects strong free cash flow expectations of about $750mn (plus or minus 10%), or near $4.00 per share, though boosted by some on-time factors and below a year ago." Bank of America Merrill Lynch currently has a Neutral rating on Molson Coors and a price objective of $47. Shares of Molson Coors closed at $45.93 on Thursday, up from $46.06 at the opening bell.