Anheuser-Busch Inbev SA (BUD) Buy or Sell Stock Guide

Last updated: Sep 23, '17

The analysis below may be helpful to you if you have any of the following questions about BUD stock:

  • Is BUD a buy or a sell?
  • Should I sell or hold BUD stock today?
  • Is BUD a good buy / a good investment?
  • What are BUD analyst opinions, recommendations, ratings?

Here are BUD stock buy reasons/signals:

1. AB InBev's worldwide scale and distribution is massive. It is the leading global brewer, and 17 of its brands each generate more than $1 billion per year in sales.

2. AB InBev has a 62% economic stake in Ambev, which has dominant share in several key markets, including Brazil (64%), Argentina (77%), and Canada (41%). Additionally, AB InBev has leading share in the United States (48%), Belgium (57%), and Ukraine (36%).

3. The company has been an efficient acquisitor. The acquisition of SABMiller should result in $1.4 billion of annual cost synergies.

4. BUD quarterly revenue growth was 31.20%, higher than the industry and sector average revenue growth (4.26% and 9.20%, respectively).

5. BUD forward dividend yield is 3.21%, higher than the industry (1.02%) and sector (1.34%) forward dividend yields.

6. BUD PEG ratio (P/E adjusted for growth) is 1.36, and it’s low compared to its industry peers’ PEG ratios.

Here are BUD stock sell reasons/signals:

1. The company's flagship Budweiser brand and sister brand Bud Light are both facing meaningful headwinds in the U.S. from craft brewers, spirits companies, and persistently high levels of unemployment.

2. Beer remains a competitive industry, particularly in developed markets, and the recent elevation in marketing spend may not reverse in the near future.

3. With its 62% economic interest in Ambev, AB InBev is heavily leveraged to Latin America. Continued economic weakness in Brazil would be detrimental to AB InBev's financial results.

4. BUD forward P/E ratio is 24.31, and it’s high compared to its industry peers’ P/E ratios.

What are your thoughts on BUD?

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