UPDATE: Credit Suisse Upgrades Anheuser-Busch InBev to Outperform on Balance Sheet Optionality
Credit Suisse upgraded Anheuser-Busch InBev (NYSE: BUD) from Neutral to Outperform.
Credit Suisse said, "We believe the market is underestimating ABI's balance sheet optionality and the potential upside to Grupo Modelo synergy targets. … With limited balance sheet impact from Modelo in our numbers, i) we believe ABI could raise its payout ratio to at least 60% in 2013E—on this basis, the stock would yield c3.5%, the highest in staples ex Tobacco. ii) We incorporate share buybacks into our model, which are c3% EPS accretive (maintaining net debt/EBITDA at the targeted 2x). This drives 2013E–16E c18% total shareholder return CAGR—best-in-class among staples despite a rising tax rate."
Anheuser-Busch InBev closed at $93.69 on Wednesday.
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