AB InBev's Market Outlook and Price Target Adjustment by Morgan Stanley

Anheuser-Busch InBev (NYSE:BUD) delivered better-than-expected first-quarter results on Thursday, driven by robust growth in South America and reduced financing costs, helping to counter weaker performances in North America and China.

The company reported revenue of $14.55 billion, reflecting 2.6% organic growth year-over-year and topping the consensus estimate of $14.36 billion. EBITDA rose 5.4% organically to $5.02 billion, ahead of the $4.91 billion analysts had projected.

Earnings per share came in at €0.85, beating expectations by 11%, with analysts attributing the surprise primarily to lower financial expenses during the quarter.

The company highlighted the resilience of its diversified geographic footprint, with solid gains in South America helping to offset softer results in Asia-Pacific and North America. While volumes declined 2.6% globally, revenue per hectoliter improved by 5.3%, indicating strong pricing power.

AB InBev reaffirmed its full-year guidance for 4% to 8% organic EBITDA growth, consistent with its longer-term strategic targets. Current consensus is anchored at 6.1%, keeping expectations firmly in the middle of that range.

Anheuser-Busch InBev (NYSE:BUD) delivered better-than-expected first-quarter results on Thursday, driven by robust growth in South America and reduced financing costs, helping to counter weaker performances in North America and China.

The company reported revenue of $14.55 billion, reflecting 2.6% organic growth year-over-year and topping the consensus estimate of $14.36 billion. EBITDA rose 5.4% organically to $5.02 billion, ahead of the $4.91 billion analysts had projected.

Earnings per share came in at €0.85, beating expectations by 11%, with analysts attributing the surprise primarily to lower financial expenses during the quarter.

The company highlighted the resilience of its diversified geographic footprint, with solid gains in South America helping to offset softer results in Asia-Pacific and North America. While volumes declined 2.6% globally, revenue per hectoliter improved by 5.3%, indicating strong pricing power.

AB InBev reaffirmed its full-year guidance for 4% to 8% organic EBITDA growth, consistent with its longer-term strategic targets. Current consensus is anchored at 6.1%, keeping expectations firmly in the middle of that range.

• Anheuser-Busch InBev SA/NV (NYSE:BUD) has produced its 100 millionth can of emergency drinking water for disaster-affected communities, highlighting its commitment to disaster relief.
• The company is investing over $6 million in its Fort Collins, Colorado brewery to enhance brewing and packaging capabilities ahead of its quarterly earnings release on May 8, 2025.
• Anheuser-Busch's financial metrics, including a price-to-earnings ratio of 22.43 and a price-to-sales ratio of 2.12, reflect investor confidence in its earnings and sales generation capabilities.

Anheuser-Busch InBev SA/NV, trading as NYSE:BUD, is a leading American beverage company known for its popular beer brands like Budweiser and Stella Artois. The company has achieved a significant milestone by producing its 100 millionth can of emergency drinking water for disaster-affected communities since 1988. This effort underscores Anheuser-Busch's commitment to disaster relief, in partnership with the American Red Cross.

In line with this milestone, Anheuser-Busch is investing over $6 million in its Fort Collins, Colorado brewery to enhance its brewing and packaging capabilities. This investment aligns with the company's financial health, as it prepares to release its quarterly earnings on May 8, 2025. Analysts estimate an earnings per share of $0.77 and a projected revenue of $13.8 billion.

The company's breweries in Fort Collins, Colorado, and Cartersville, Georgia, are proactive in producing emergency drinking water, ensuring readiness for disaster response. Anheuser-Busch's financial metrics, such as a price-to-earnings ratio of 22.43 and a price-to-sales ratio of 2.12, reflect investor confidence in its ability to generate earnings and sales.

Anheuser-Busch's annual campaign to deliver 1.5 million cans of emergency drinking water to volunteer fire departments across 45 states highlights its commitment to community welfare. The company's enterprise value to sales ratio of 3.14 and enterprise value to operating cash flow ratio of 15.04 provide insight into its valuation and cash flow generation capabilities.

Despite a debt-to-equity ratio of 0.92, indicating moderate leverage, Anheuser-Busch's efforts in disaster preparedness and community support remain strong. However, a current ratio of 0.70 suggests potential liquidity challenges in meeting short-term obligations, emphasizing the importance of strategic financial management.

• Anheuser-Busch InBev SA/NV (NYSE:BUD) has produced its 100 millionth can of emergency drinking water for disaster-affected communities, highlighting its commitment to disaster relief.
• The company is investing over $6 million in its Fort Collins, Colorado brewery to enhance brewing and packaging capabilities ahead of its quarterly earnings release on May 8, 2025.
• Anheuser-Busch's financial metrics, including a price-to-earnings ratio of 22.43 and a price-to-sales ratio of 2.12, reflect investor confidence in its earnings and sales generation capabilities.

Anheuser-Busch InBev SA/NV, trading as NYSE:BUD, is a leading American beverage company known for its popular beer brands like Budweiser and Stella Artois. The company has achieved a significant milestone by producing its 100 millionth can of emergency drinking water for disaster-affected communities since 1988. This effort underscores Anheuser-Busch's commitment to disaster relief, in partnership with the American Red Cross.

In line with this milestone, Anheuser-Busch is investing over $6 million in its Fort Collins, Colorado brewery to enhance its brewing and packaging capabilities. This investment aligns with the company's financial health, as it prepares to release its quarterly earnings on May 8, 2025. Analysts estimate an earnings per share of $0.77 and a projected revenue of $13.8 billion.

The company's breweries in Fort Collins, Colorado, and Cartersville, Georgia, are proactive in producing emergency drinking water, ensuring readiness for disaster response. Anheuser-Busch's financial metrics, such as a price-to-earnings ratio of 22.43 and a price-to-sales ratio of 2.12, reflect investor confidence in its ability to generate earnings and sales.

Anheuser-Busch's annual campaign to deliver 1.5 million cans of emergency drinking water to volunteer fire departments across 45 states highlights its commitment to community welfare. The company's enterprise value to sales ratio of 3.14 and enterprise value to operating cash flow ratio of 15.04 provide insight into its valuation and cash flow generation capabilities.

Despite a debt-to-equity ratio of 0.92, indicating moderate leverage, Anheuser-Busch's efforts in disaster preparedness and community support remain strong. However, a current ratio of 0.70 suggests potential liquidity challenges in meeting short-term obligations, emphasizing the importance of strategic financial management.

Anheuser-Busch InBev (NYSE:BUD) delivered a robust fourth-quarter performance, exceeding analyst expectations and driving its stock up more than 8% intra-day on Wednesday. The company marked its third straight year of hitting the high end of its guidance, underscoring consistent financial strength.

The company reported a 10.1% increase in EBITDA, outpacing the expected 7.7% growth. Full-year earnings per share landed at $3.53, surpassing the $3.34 consensus estimate, fueled by strong profit expansion and favorable financial adjustments.

Key markets contributed significantly to the upbeat results, with EBITDA surging 11.3% in South America and 16.3% in the EMEA region. Free cash flow also showed meaningful improvement, helping net debt to EBITDA decline to 2.89x, ahead of the projected 3x, positioning the company for greater financial flexibility. This strengthened balance sheet allowed ABI to boost its dividend to €1 per share, exceeding investor expectations.

While organic volumes dipped 1.9%, falling slightly below the -1.3% consensus estimate, revenue climbed 3.4%, surpassing the 2.4% forecast—a reflection of strategic pricing and product mix improvements.

For fiscal year 2025, the company reaffirmed its EBITDA growth outlook of 4-8%, aligning with its long-term targets. Additionally, net pension interest and accretion expenses are projected to decline, reducing from $220-250 million per quarter to $190-220 million, as ABI continues to chip away at its debt obligations.

Anheuser-Busch InBev (NYSE:BUD) delivered a robust fourth-quarter performance, exceeding analyst expectations and driving its stock up more than 8% intra-day on Wednesday. The company marked its third straight year of hitting the high end of its guidance, underscoring consistent financial strength.

The company reported a 10.1% increase in EBITDA, outpacing the expected 7.7% growth. Full-year earnings per share landed at $3.53, surpassing the $3.34 consensus estimate, fueled by strong profit expansion and favorable financial adjustments.

Key markets contributed significantly to the upbeat results, with EBITDA surging 11.3% in South America and 16.3% in the EMEA region. Free cash flow also showed meaningful improvement, helping net debt to EBITDA decline to 2.89x, ahead of the projected 3x, positioning the company for greater financial flexibility. This strengthened balance sheet allowed ABI to boost its dividend to €1 per share, exceeding investor expectations.

While organic volumes dipped 1.9%, falling slightly below the -1.3% consensus estimate, revenue climbed 3.4%, surpassing the 2.4% forecast—a reflection of strategic pricing and product mix improvements.

For fiscal year 2025, the company reaffirmed its EBITDA growth outlook of 4-8%, aligning with its long-term targets. Additionally, net pension interest and accretion expenses are projected to decline, reducing from $220-250 million per quarter to $190-220 million, as ABI continues to chip away at its debt obligations.

• Morgan Stanley sets a new price target of $63 for NYSE:BUD, indicating a potential 35% increase.
• The adjustment reflects recent market data and foreign exchange rates, with an Overweight rating maintained.
• Despite recent volatility and a decrease in share price, AB InBev shows potential for growth and "very attractive" cash returns in the latter half of the year.

AB InBev, listed on the NYSE under the symbol BUD, is a leading global brewer known for its extensive portfolio of beer brands. The company operates in various markets worldwide, facing competition from other major brewers like Heineken and Molson Coors. On January 9, 2025, Morgan Stanley's Sarah Simon set a price target of $63 for BUD, suggesting a potential 35% increase from its then-current price of $46.41.

Sarah Simon's revised price target of $63, down from $68.50, reflects recent market data and foreign exchange rates impacting AB InBev's profitability. Despite the adjustment, Simon maintains an Overweight rating, indicating confidence in the stock's potential. 

The stock's recent performance shows a fluctuation between $46.10 and $48.38, with a 52-week high of $67.49 and a low of $46.10. This volatility highlights the challenges and opportunities in the market. AB InBev's market capitalization stands at approximately $91.58 billion, reflecting its significant presence in the industry.

Despite the potential for "very attractive" cash returns, Morgan Stanley anticipates more substantial growth and share price performance in the latter half of the year. This outlook has led to the removal of AB InBev as Morgan Stanley's "Top Pick" in the Beverages sector, as highlighted by the firm, due to better near-term opportunities elsewhere.

The trading volume for BUD is 5,487,167 shares, indicating active investor interest. As the year progresses, investors will likely monitor AB InBev's performance closely, considering the potential for growth and the impact of market conditions on its profitability.