Molson Coors Beverage (TAP) posted a modest Q3 miss and faces cyclical and structural headwinds already reflected in its low valuation, Morgan Stanley said in a note Wednesday.

The company reported underlying Q3 earnings per share of $1.67, below the $1.69 consensus, and revenue that missed Street estimates by roughly 1.4%.

Shipment volumes were weaker than expected, with US depletions down about 4.9% and Americas shipments down roughly 6.5%. Gross margin beat by about 50 basis points but underlying operating profit was slightly below forecasts, according to Morgan Stanley.

The bank highlighted a $3.6 billion goodwill impairment tied to the Americas business and $274 million of other impairments, and said greater focus on mergers and acquisitions under new Chief Executive Officer Rahul Goyal raises capital deployment risk even as the company looks to fill portfolio gaps, notably ready-to-drink spirits and beyond beer.

Morgan Stanley cut its price target to $48 from $53, and kept an equal-weight rating on the stock.

Shares of the company were up 2.2% in recent Wednesday trading.

Price: 44.64, Change: +0.97, Percent Change: +2.22