Anheuser-Busch InBev stock price target lowered by Bernstein to €77

Investing.com - Bernstein SocGen Group lowered its price target on Anheuser-Busch InBev (NYSE:BUD), a prominent beverages industry player with a market cap of $136 billion and strong financial health metrics according to InvestingPro, to €77.00 from €79.00 while maintaining an Outperform rating on the stock ahead of the company’s July 31 earnings report.

The firm cited several factors for the adjustment, including expected margin pressure in Brazil and Mexico during the second half of the year due to foreign exchange hedges turning negative, though the ultimate impact will depend on offsetting price increases. The company currently maintains impressive gross profit margins of 55.6%.

Bernstein also reduced its assumptions for income from associates, specifically mentioning Castel and Efes, and slightly lowered estimates for volume growth in the United States due to continued market weakness, despite AB InBev outperforming the broader market in recent scanner data. Despite market challenges, the stock has shown remarkable resilience with a 40.3% gain year-to-date. Get deeper insights into AB InBev’s performance metrics and growth potential with InvestingPro, which offers exclusive analysis and 7 additional ProTips for this stock.

The analyst firm trimmed its euro-denominated earnings per share estimates by 1.4% for fiscal year 2025 and 2.6% for fiscal year 2026, while modeling organic EBITDA growth of 7.1% for FY25, within the company’s guidance range of 4%-8% and above consensus estimates of 6.1%.

Bernstein noted that the weakness of the U.S. dollar has benefited AB InBev’s dollar-denominated profit and loss statement by approximately 3% in the past month, and set a corresponding price target of $91 for U.S. ADRs. According to InvestingPro’s Fair Value analysis, the stock currently appears slightly undervalued, with analysts’ targets ranging from $65 to $91.

In other recent news, Anheuser-Busch InBev’s first-quarter performance has garnered attention from analysts, leading to adjustments in stock price targets. Evercore ISI raised its price target for the company to $80, highlighting the impressive organic EBITDA growth of 7.9%, which exceeded expectations. This growth marks the 14th consecutive quarter that Anheuser-Busch has achieved its medium-term target, showcasing the company’s positive momentum and market share gains, particularly in the United States. Morgan Stanley (NYSE:MS) also revised its price target for Anheuser-Busch to $78, maintaining an Overweight rating, following a review of foreign exchange rates and the company’s earnings results. The firm noted an increase in expected organic EBITDA growth to 6.3% and adjusted its EPS forecasts for future fiscal years. Additionally, Anheuser-Busch may benefit from potential changes in U.S. Dietary Guidelines, which are expected to encourage moderation rather than specific daily drink limits. This shift could represent a positive development for the alcohol industry, which has faced scrutiny over health concerns. These recent developments reflect a period of strategic focus and potential growth for Anheuser-Busch InBev.

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