BUD

Anheuser-Busch InBev SA/NV

Consumer


Presented:11/06/2018
Price:$76.64
Cap:$124.98B
Current Price:$65.43
Cap:$114.50B

Presented

Date11/06/2018
Price$76.64
Market Cap$124.98B
Ent Value$318.16B
P/E Ratio18.48x
Book Value$35.01
Div Yield6.24%
Shares O/S1,630.77M
Ave Daily Vol1,883,791
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 (BUD), Constellation Brands Inc (STZ), Heineken NV (HEIA NA), Molson Coors Brewing Company (TAP)

Highlights

The presenter is long shares of Anheuser-Busch (BUD) and feels its global market leading position should allow for more pricing power to drive higher operating profits. Additionally, there is a massive opportunity for BUD’s high-end craft segment to enter new markets. The stock has been under pressure from negative industry sentiment, greater competition, unfavorable foreign exchange rates, and the recent 50% dividend cut (which sent the stock down ~10% on 10/25/2018). However, he believes these issues will subside. He values the company by splitting it into two segments, the North America business ($5B+ operating profit at 15x) and the international business (~$14B operating profit at 17x) for a sum-of-the-parts (SOTP) value of $320B. After stripping out net debt of $110B and $30B in minority interest, he gets a fair value of $90 or 20% upside from current levels.

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Idea Discussion

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