UPDATE: UBS Starts Molson Coors (TAP) at Neutral

UBS initiated coverage on Molson Coors (NYSE: TAP) with a Neutral rating and a price target of $107.

Analyst Stephen Powers said, "Now that the transformational MillerCoors deal is behind us, we see significant cost savings/synergy realization at TAP—specifically, we model $650M in gross cost savings and deal synergies combined by 2019, sourced from procurement, supply chain, and shared services. Unlike most deals, there is limited operational overlap between combined entities here (existing only in regions close to the US/Canadian border, plus theoretical revenue synergies behind the Miller brand overseas)—nevertheless, TAP’s strong track record of driving costs out (plus comparable deal synergy benchmarks) pushes our base case savings estimates $100M ahead of company guidance of $550M."

For an analyst ratings summary and ratings history on Molson Coors click here. For more ratings news on Molson Coors click here.

Shares of Molson Coors closed at $99.04 yesterday.

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