Bernstein Analysts Remain Optimistic on AB InBev Stock Despite Bud Light Volume Decline
Bernstein said Bud Light volumes have further to fall, but is still optimistic on AB InBev’s stock going forward. The firm reiterated an outperform rating on Anheuser-Busch with a $71.60 price target, which represents upside of 30% from Monday’s close. Analyst Trevor Stirling noted that the massive selloff in the stock stemming from customer backlash over the company’s social media partnership with a transgender influencer was largely “overdone.” AB InBev shares are down more than 17% in the second quarter. BUD YTD mountain BUD in 2023 He noted that the company’s “Stub ABI” segment — which excludes Bud APAC and Ambev — is now trading at an all-time low multiple. “We believe this is an attractive entry point ahead, as raw material inflation eases and translates into better margins,” Stirling said. Still, he said Bud Light volumes could continue to take a hit after already falling by roughly 30% in the U.S. in the second quarter. “We also assume that Bud Light volumes will take a permanent -15% haircut with an associated drag on operating leverage,” the analyst said. Last month, HSBC downgraded Anheuser-Busch InBev stock over what the firm labeled a “Bud Light crisis,” and noted that the company could be contending with larger problems than it wants to admit. — AsumeTech’s Michael Bloom contributed to this report.
Analysts Reiterate Outperform Rating on Anheuser-Busch
Bernstein analysts have reiterated their outperform rating on Anheuser-Busch InBev’s stock, despite Bud Light volumes continuing to decline. They have set a $71.60 price target, which represents an upside of 30% from Monday’s close. This comes as AB InBev shares have fallen more than 17% in the second quarter.
Selloff from Social Media Partnership with Transgender Influencer Largely “Overdone”
Analyst Trevor Stirling noted that the massive selloff in AB InBev’s stock following customer backlash over the company’s social media partnership with a transgender influencer was largely “overdone.”
“Stub ABI” Segment Trading at All-Time Low Multiple
Stirling also pointed out that the company’s “Stub ABI” segment, which excludes Bud APAC and Ambev, is now trading at an all-time low multiple. He sees this as an attractive entry point for investors, as raw material inflation eases and translates into better margins for the company.
Continued Decline in Bud Light Volumes Expected
Despite the optimism, Stirling acknowledges that Bud Light volumes could continue to decline, with an estimated permanent -15% haircut and associated drag on operating leverage.
HSBC Downgraded Stock Over “Bud Light Crisis”
Last month, HSBC downgraded AB InBev’s stock over what the firm labeled a “Bud Light crisis,” and suggested that the company could be facing larger problems than it wants to admit.
