BUD

Anheuser-Busch InBev SA/NV

Consumer


Presented:01/30/2019
Price:$74.94
Cap:$122.21B
Current Price:$65.43
Cap:$114.50B

Presented

Date01/30/2019
Price$74.94
Market Cap$122.21B
Ent Value$318.16B
P/E Ratio18.07x
Book Value$35.01
Div Yield2.43%
Shares O/S1,630.77M
Ave Daily Vol1,922,684
Short IntN/A

Current

Price$65.43
Market Cap$114.50B
Anheuser-Busch InBev SA/NV is a holding company, which engages in the manufacture and distribution of alcoholic and non-alcoholic beverages. It operates through the following segments: North America, Latin America West, Latin America North, Latin America South, EMEA, Asia Pacific, and Global Export and Holding Companies. The Global Export and Holding Companies segment includes the global headquarters and the export businesses in other countries. Its brands include Budweiser, Corona and Stella Artois; multi-country brands Beck's, Castle, Castle Lite, Hoegaarden and Leffe; and local champions, such as Aguila, Antarctica, Bud Light, Brahma, Cass, Chernigivske, Cristal, Harbin, Jupiler, Klinskoye, Michelob Ultra, Modelo Especial, Quilmes, Victoria, Sedrin, Sibirskaya Korona, and Skol. The company was founded on March 3, 2016 and is headquartered in Leuven, Belgium.

Publicly traded companies mentioned herein: Anheuser-Busch InBev SA/NV (ABI BB; BUD), Carlsberg A/S (CARLB DC), Heineken NV (HEIA NA), Kirin Holdings Co Ltd (2503 JP)

Highlights

Anheuser-Busch InBev (ABI, or BUD) stock has been a “big underperformer” over the past 12 months (down ~30%). The presenter is short the stock and sees the potential for secular headwinds to lead to reductions in Street estimates for the $155B beer company. Risks ABI faces at this time include: declining global beer consumption, rising competition, and CEO Carlos Brito et al., may not be able to do “the next deal” given ~$116B in debt on the balance sheet (and no quick path to paying that down). Additionally, ABI’s earnings quality has eroded and the synergies from the SABMiller deal have mostly been realized. Putting it all together, the risk/reward favors bears, and the price target is $51 (based on 10x below-Street forward EBITDA, which is a 1 - 2 turn discount to the multiple based on the consensus).

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