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On Thursday, TD Cowen adjusted its outlook on Anheuser-Busch InBev (EBR:ABI) shares, raising the price target to $62 from the previous $55, while maintaining a Hold rating on the stock. According to InvestingPro analysis, the stock appears undervalued at its current market cap of $118.4 billion. The revised price target follows Anheuser-Busch’s latest performance report, which showcased organic sales growth surpassing expectations.
Anheuser-Busch reported a 3.4% increase in organic sales, which was 0.8 percentage points higher than TD Cowen’s estimates. The company maintains impressive gross profit margins of 55.25% and has achieved an 18.85% return year-to-date. While the company experienced a 1.9% decline in volume, the U.S. business showed significant improvement, evidenced by market share gains and positive depletion rates—a measure of sales from distributors to retailers.
The firm’s analysts believe that the growth of specific brands like Michelob Ultra and Busch Light could potentially mitigate some of the structural challenges facing the U.S. beer market. This viewpoint is based on recent positive trends within Anheuser-Busch’s domestic operations.
In light of these developments, TD Cowen has also updated its earnings per share (EPS) projections for Anheuser-Busch. The firm now anticipates an EPS of $3.54 for the year 2025, followed by an increase to $4.08 in 2026.
The analyst’s commentary highlighted the mixed results, with the positive sales growth being tempered by continued volume pressure across the global market. The revised price target of $62 reflects these considerations and the updated earnings forecast. InvestingPro analysis reveals the company has achieved a perfect Piotroski Score of 9, indicating strong financial health. Subscribers can access 10+ additional ProTips and a comprehensive Pro Research Report for deeper insights into Anheuser-Busch’s financial outlook.
In other recent news, Anheuser-Busch InBev has been the focus of several notable developments. Evercore ISI maintained its Outperform rating on the company, citing a modest improvement in U.S. beer volumes and increased market share, particularly with the Michelob Ultra brand. On the financial front, JPMorgan reiterated its Overweight rating, highlighting Anheuser-Busch’s potential for a top-line recovery and a consistent delivery on its organic EBITDA growth target. The firm expects the company to achieve a 7% compound annual growth rate from 2023 to 2028, with a significant margin upside projected in the medium term.
Bernstein also maintained an Outperform rating but adjusted its price target from $78.00 to $73.00, reflecting expectations for a rebound in profit margins, particularly in the United States. Despite a decline in stock value during the fourth quarter, Bernstein finds the company’s valuation appealing and anticipates ongoing efficiency improvements. The analysts noted that Anheuser-Busch is poised for stable cost environments in various markets, with potential challenges from foreign exchange rates. These updates provide investors with insights into Anheuser-Busch’s strategic positioning and financial outlook.
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