Skip to main content

Market Overview

Above-Average Growth At Anheuser Busch Is Turning Sour, JPMorgan Says

Above-Average Growth At Anheuser Busch Is Turning Sour, JPMorgan Says

JPMorgan handed Anheuser Busch Inbev NV (ADR) (NYSE: BUD) a downgrade, concluding that the era of above-average growth for AB Inbev is fading. 

The Analyst

JPMorgan analyst Komal Dhillon downgraded her ratings on the shares of AB Inbev from Neutral to Underweight, with the price target for its ADR reduced from $122.66 to $106.69.

The Thesis

Anheuser was a "beacon of high growth" in the European beverage sector for more than a decade with superior pricing power and above-average profit growth, Dhillon said in a Tuesday note. 

But AB Inbev may be transitioning to an era of more muted performance, the analyst said. 

The market is overly optimistic concerning Anheuser's turnaround in Brazil, as well as the ability of its global brands — excluding domestic markets — to offset ongoing challenges in the U.S., according to JPMorgan. Dhillon said she expects underperformance in the U.S. to weigh on group profit until at least fiscal 2020.

Despite AB Inbev's in-line underlying growth and ongoing challenges, Dhillon said the stock trades at a premium to the European beverage sector.

The downgrade, according to the analyst, was prompted by expectations that the recent underperformance is likely to persist. The analyst said better growth opportunities exist with Diageo plc (ADR) (NYSE: DEO)

The Price Action

AB Inbev shares are up about 7.5 percent year-to-date.

At the time of writing, the shares were retreating 2.05 percent to $113.07.

Related Links:

Budweiser To Rocket Barley Seeds To Space In Prep For Mars Brewery 

World's Biggest Beer Companies Get Some Help From Europe

Latest Ratings for BUD

Oct 2020JefferiesUpgradesHoldBuy
Jul 2020Evercore ISI GroupUpgradesIn-LineOutperform
May 2020CFRAMaintainsHold

View More Analyst Ratings for BUD
View the Latest Analyst Ratings


Related Articles (BUD)

View Comments and Join the Discussion!

Posted-In: Beer beverages JP Morgan Komal DhillonAnalyst Color Downgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

GIKColliers SecuritiesInitiates Coverage On14.0
SANWLake StreetInitiates Coverage On6.0
LILAMorgan StanleyDowngrades15.0
BEJP MorganUpgrades36.0
NEXACredit SuisseUpgrades11.0
View the Latest Analytics Ratings
Don't Miss Any Updates!
News Directly in Your Inbox
Subscribe to:
Benzinga Premarket Activity
Get pre-market outlook, mid-day update and after-market roundup emails in your inbox.
Market in 5 Minutes
Everything you need to know about the market - quick & easy.
Fintech Focus
A daily collection of all things fintech, interesting developments and market updates.
Everything you need to know about the latest SPAC news.
Thank You

Thank you for subscribing! If you have any questions feel free to call us at 1-877-440-ZING or email us at