Molson Coors presents a value opportunity at current levels, trading at just 8.3 times 2026 estimated earnings and with a high yield. However, the fundamental business faces severe structural challenges with brand volumes declining across all segments, especially as the U.S. beer market keeps declining.
The company is making moves to cut costs as well as diversify, but for now, we see the stock as a hold.
MOLSON COORS CANADA INC. (Toronto symbols TPX.A and TPX.B; www.molsoncoors.com) has as its main brands Molson Canadian (Canada), Coors Light (the U.S.) and Carling (the U.K.).
Under its plan to add non-beer drinks to its portfolio, Molson recently acquired the rights to produce, market and sell Fever-Tree products in the U.S. Based in the U.K., that firm makes a variety of tonics, ginger beers and cocktail mixers. As part of the deal, the company paid $90 million U.S. for an 8.5% stake in Fever-Tree’s parent company.
The world’s fourth-largest beer brewer is now cutting 9% of its North American workforce. That’s due to higher costs for steel and aluminum due to tariffs. Increasingly, health-conscious consumers are also drinking less beer.
Molson expects severance payments and other costs will range between $35 million and $50 million. The company has not yet said how much it expects these moves will cut from its annual costs. However, it plans to use the savings to expand its non-beer portfolio, including premium mixers, non-alcohol beverages, and energy drinks.
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Molson’s high yield shares are trading very cheaply—but for a reason
In the quarter ended September 30, 2025, Molson’s sales fell 2.3%, to $2.97 billion from $3.04 billion a year earlier (all amounts in U.S. dollars). Excluding currency exchange rates, sales decreased 3.3% as lower volumes (down 6.0%) offset higher prices (up 2.7%).
Excluding unusual items, earnings fell 11.6%, to $330.8 million from $374.4 million. Due to fewer shares outstanding, per-share earnings declined 7.2%, to $1.67 from $1.80.
Molson expects the new U.S. tariffs on steel and aluminum will add between $20 million and $35 million to its packaging costs in the second half of the year.
In response, as mentioned, Molson is now cutting 9% of its North American workforce. The company expects severance payments and other costs will range between $35 million and $50 million.
Savings from the plan will probably lift Molson’s estimated earnings by 3%, from $5.39 a share to $5.56 U.S. in 2026. The class B shares trade at 8.3 times that 2026 forecast. The $1.88 dividend yields 4.1% for the class B shares.
Recommendation in The Successful Investor: Molson Coors Canada Inc. is a hold.
