Boston Beer (SAM) is likely to see continued headwinds amid declining volumes in the alcohol sector and cost pressures from the Iran conflict, Morgan Stanley said in a Wednesday note.

US alcohol consumption remain pressured from demographics, cannabis substitution, and health trends, the investment firm said. The company's Twisted Tea and Truly hard seltzer brands also continue to decline, Morgan Stanley noted.

The company already narrowed its fiscal 2026 outlook for shipments/depletions to the lower end of its previously issued guidance to reflect energy and aluminum inflation, the brokerage said. Boston Beer now expects shipments/depletions to decline by low-single to mid-single digits.

Morgan Stanley lowered its 2026 and 2027 earnings per share forecast for Boston Beer by about 5%.

Morgan Stanley also cut its price target on Boston Beer to $220 from $235, with an equal-weight rating.

Price: 210.24, Change: +3.99, Percent Change: +1.93