Equities research analysts at Morgan Stanley started coverage on shares of Anheuser Busch Inbev SA (NYSE:BUD) in a research note issued to investors on Wednesday. The firm set an “overweight” rating on the stock.
The analysts wrote, “We believe ABInBev offers the best combination of organic sales growth and self help across Global FMCG, which should command a valuation premium,” analyst Olivier Nicolai wrote in a note.Nicolai’s bullish thesis is based on “1) rapid top-line growth and a well-diversified group post the deal; 2) cost and revenue synergies will support group EBIT; 3) the shares warrant a 15 percent premium to global FCMG, given the stronger earnings growth profile.”Post disposal of the low-growth assets from SAB (United States, China, Europe), the analyst expects Anheuser-Busch to grow organic sales by close to 6 percent a year and EBITDA by about 10 percent a year in FY17-20, putting the company’s profitability and cash generation higher than peers.In addition, the analyst said very high market share with strong pricing power across most of its markets provides more visibility on earnings.Related Link: This Penalty’s For You: Anheuser-Busch Ordered To Pay Up For Violating Whistleblower ProtectionsMeanwhile, Nicolai projects cost synergies of $2.5 billion. Anheuser-Busch has guided to at least $1.4 billion over four years from completion plus the $0.5 billion remaining cost savings previously announced by SABMiller. Further, the analyst expects the company to generate an additional $500 million in EBIT from revenue synergies by 2020 and $1 billion by 2022, six years after completion of the deal.In fact, Nicolai pointed out that revenue synergies would be the key medium-term upside driver as ABI rolls out its international brands Corona, Stella Artois and Budweiser into SAB markets — Colombia, Peru and South Africa, as well as the rest of Africa.”In addition to a review of pricing strategy, we expect positive mix, as we saw in Brazil and China where ABI was successful in its strategy around Bud and Stella,”
A number of other research firms have also weighed in on BUD. Citigroup Inc. restated a “buy” rating on shares of Anheuser Busch Inbev SA in a research note on Monday, September 26th. Zacks Investment Research upgraded shares of Anheuser Busch Inbev SA from a “hold” rating to a “strong-buy” rating and set a $141.00 target price on the stock in a research note on Wednesday, September 14th. Kepler Capital Markets upgraded shares of Anheuser Busch Inbev SA from a “hold” rating to a “buy” rating in a research note on Monday, August 22nd. Vetr lowered shares of Anheuser Busch Inbev SA from a “buy” rating to a “hold” rating and set a $137.94 target price on the stock. in a research note on Wednesday, September 28th. Finally, Royal Bank Of Canada lowered shares of Anheuser Busch Inbev SA from a “sector perform” rating to an “underperform” rating and upped their target price for the stock from $102.00 to $106.00 in a research note on Wednesday, July 6th. One investment analyst has rated the stock with a sell rating, five have assigned a hold rating, thirteen have given a buy rating and one has issued a strong buy rating to the company’s stock. The stock has a consensus rating of “Buy” and an average target price of $133.42.
Anheuser Busch Inbev SA (NYSE:BUD) opened at 127.26 on Wednesday. The stock has a market capitalization of $204.60 billion and a price-to-earnings ratio of 53.83. Anheuser Busch Inbev SA has a 52-week low of $110.59 and a 52-week high of $136.08. The firm’s 50-day moving average is $127.05 and its 200-day moving average is $126.02.
Anheuser Busch Inbev SA (NYSE:BUD) last issued its quarterly earnings results on Friday, July 29th. The company reported $1.06 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $1.00 by $0.06. The business had revenue of $10.81 billion for the quarter, compared to analysts’ expectations of $10.93 billion. The firm’s revenue for the quarter was down 2.2% on a year-over-year basis. During the same quarter last year, the company earned $1.21 earnings per share. Analysts predict that Anheuser Busch Inbev SA will post $3.70 earnings per share for the current year.
Several large investors have recently bought and sold shares of the stock. Fisher Asset Management LLC increased its stake in Anheuser Busch Inbev SA by 1.9% in the second quarter. Fisher Asset Management LLC now owns 5,393,010 shares of the company’s stock valued at $687,231,000 after buying an additional 101,061 shares during the last quarter. Franklin Resources Inc. boosted its stake in Anheuser Busch Inbev SA by 146.4% in the second quarter. Franklin Resources Inc. now owns 5,189,442 shares of the company’s stock valued at $683,345,000 after buying an additional 3,083,352 shares during the period. Lone Pine Capital LLC boosted its stake in Anheuser Busch Inbev SA by 124.1% in the second quarter. Lone Pine Capital LLC now owns 4,207,607 shares of the company’s stock valued at $554,058,000 after buying an additional 2,329,803 shares during the period. Harding Loevner LP boosted its stake in Anheuser Busch Inbev SA by 0.3% in the second quarter. Harding Loevner LP now owns 2,395,280 shares of the company’s stock valued at $315,408,000 after buying an additional 7,192 shares during the period. Finally, Senator Investment Group LP boosted its stake in Anheuser Busch Inbev SA by 95.8% in the second quarter. Senator Investment Group LP now owns 2,350,000 shares of the company’s stock valued at $309,448,000 after buying an additional 1,150,000 shares during the period.
About Anheuser Busch Inbev SA
Anheuser-Busch Inbev SA (AB InBev) is a global brewer. The Company has a portfolio of over 200 beer brands. The Company operates through seven segments: North America, Mexico, Latin America North, Latin America South, Europe, Asia Pacific, and Global Export and Holding Companies. The Company’s brand portfolio includes global brands, such as Budweiser, Corona and Stella Artois; international brands, including Beck’s, Leffe and Hoegaarden, and local champions, such as Bud Light, Skol, Brahma, Antarctica, Quilmes, Victoria, Modelo Especial, Michelob Ultra, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske, Cass and Jupiler.
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