10:55 AM EDT, 06/27/2025 (MT Newswires) -- Molson Coors Beverage ( TAP/A ) may struggle to meet prior expectations as the US beer industry continues to decline below historic trends and the company's market share losses persist, BofA Securities said in a note Friday.

The firm had expected the industry's volume declines to moderate in 2025 and Molson Coors' ( TAP/A ) market share to stabilize, supporting revenue and valuation. But that hasn't happened as volume remains weak, market share losses continue, and uncertainty clouds the outlook, according to the note.

The brokerage now forecasts a 4% decline in US beer volumes in 2025, compared with a 1% decline previously. That volume weakness creates margin risk, as every 1 million hectoliter drop in shipments adds about 100 basis points of cost inflation.

While Molson Coors ( TAP/A ) has modernized its North American breweries to improve flexibility, the setup still depends on consistent volume throughput.

The analysts noted that spirits continue to win share from beer, while ready-to-drink formats are increasingly cutting into traditional beer occasions. At the same time, energy drinks are leveraging beer distribution networks to expand their reach, adding further competitive pressure on traditional brewers.

The firm also lowered its fiscal 2025 and fiscal 2026 EPS estimates to $5.70 and $6.02, respectively, from $6.02 and $6.55, citing weaker-than-expected Q2 trends and a more cautious revenue outlook.

BofA downgraded the company's stock rating to neutral from buy and lowered its price objective to $50 from $65.

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