The Unlikely Winners From Wall Street On ‘Patty’s’ Day

St. Patrick’s Day 2020 proved to be a brief respite from the doom and gloom of late as the markets recovered some of their staggering losses

As I type this story out from the isolation of my home, not a hangover in sight, it is with great joy that I can bring a refreshing story from my country’s national holiday. 

I’m not going to lie, it has been a gloomy few weeks, putting it mildly, and when I woke up to the news that the greatest quarterback of all time, Tom Brady, was leaving the Patriots, I thought I was in for yet another miserable day in isolation-land. Not only that, but there were no celebrations, no parades, not even a pint of Guinness for me to brandish in a patriotic salute to my nation’s proud history. 

Despite this, somehow, against all odds, the alcohol industry still managed to perk me up. Not from the bottom of a glass, but from the little green numbers showing beside the tickers of some of my favorite alcohol stocks. 

Brown Forman Gets An Upgrade

You would think that the looming threat of large-scale bar closures would hurt Jack Daniel’s parent Brown Forman (NYSE: BF.B), but it appears that the reality runs contrary to this.

We’ve all seen the videos and pictures on Facebook (NASDAQ: FB) and Twitter (NYSE: TWTR) of hordes of panicked shoppers stuffing their cards and waiting in two-mile-long queues. However, it appears that they’re also buying alcohol too. Why didn’t I think of that? 

Brown Forman’s stock jumped more than 14% on St. Patrick’s Day after analysts lowered earnings per share estimates for full-year 2020 to $1.75, and upgraded the stock from a ‘sell’ rating to ‘hold’. According to CFRA analyst Garrett Nelson:

“While sales to restaurants are likely to suffer, we think stay-at-home trends bode positively for alcohol consumption trends”.

Brown Forman shares are down roughly 18% in the past month, compared with the S&P 500’s (NYSEARCA: VOO) 25% loss in the same period.

Boston Beer’s Big Break

Another unlikely beneficiary of a relatively dry St. Patrick’s Day was Sam Adams parent Boston Beer (NYSE: SAM), which rose nearly 14% on the news that MKM analysts had moved the stock to a ‘buy’ rating. 

The decision comes after analyst Bill Kirk laid out the theses that beer brands do relatively well during times of economic downturn. Boston Beer has also fallen 18% in the past month, but according to Kirk: 

“As long as grocery stores and liquor stores remain open, we don’t expect aggregate beer volumes to be meaningfully impacted.”

If the New England Patriots were a publicly-traded company, the Tom Brady news probably would have sent its stock to zero, so it’s nice for the city of Boston to get a win, especially on Paddy’s Day. 

Other alcohol stocks making moves

Another alcohol stock that was in the green yesterday — pun intended — was Budweiser parent Anheuser Busch Inbev NV (NYSE: BUD), which rose more than 2%. The world’s largest brewer announced that it had taken out its entire $9 billion loan facility to stave off the effects of the coronavirus, as Earth’s leaders urged people to stay away from bars and restaurants. 

The company has been in need of a break, as its association with the Corona Beer brand has, incredibly, hurt its stock badly recently. Anheuser stock has fallen more than 40% in the past month alone. It took some people quite a while to figure out that corona beer was in no way affiliated with coronavirus, which is not a sentence I expected to write at any point in my career…

It has not been an easy time for anyone as of late and even though there is a lot to be negative about, we must also focus on the positives. Other brands such as Guinness owner Diageo (NYSE: DEO) could expect to make massive losses yesterday, seeing what is normally its busiest day of the year canceled. However, its stock remained relatively flat, unlike a proper pint of the ‘black stuff’, as we call Guinness here. 

It’s going to be a rough few months, but there’s no reason we can’t all look on the bright side every now and again.

MyWallSt operates a full disclosure policy. MyWallSt staff currently holds long positions in companies mentioned above. Read our full disclosure policy here.