Skip to main content

Market Overview

Anheuser Busch Inbev Deserves 15% Premium To Peers, Bernstein Says In Upgrade

Anheuser Busch Inbev Deserves 15% Premium To Peers, Bernstein Says In Upgrade

Anheuser Busch Inbev NV (ADR) (NYSE: BUD) is through the worst of its operational challenges, although its valuation has taken a roller coaster ride over the last five years, according to Bernstein.  

The Analyst

Bernstein analyst Trevor Stirling upgraded AB InBev from Market Perform to Outperform and upped the price target from $120.60 to $132.08.

The Thesis

AB InBev offers best-in-class earnings per share growth and "outstanding" operating return on invested capital and cash conversion, despite trading at a mere 6-percent premium to peers, Stirling said in a Monday note.

The stock deserves a 15-percent premium to its peer group, the analyst said. 

The Sabmiller Ltd (ADR) (OTC: SBMRY) acquisition has diversified AB InBev's sources of growth, with the synergies increasing the proportion of underlying profits from high-growth emerging markets to just under 60 percent on a 2018 pro forma basis, Stirling said.

Bernstein projects five-year CAGR organic top-line growth of 5 percent; organic EBIT growth of 8 percent; EPS growth of 13 percent and total shareholder returns of 17 percent, including dividends.

These metrics can be achieved — even while assuming no improvements in the U.S. — on the basis of the embedded growth in emerging markets, along with the remaining SABMiller synergies and steady premiumization, Stirling said. 

The Price Action

AB InBev shares are up about 9 percent over the past year.

The stock was up 1.48 percent after the open monday at $116.90. 

Related Links:

Heartbreak And Desire: 11 Of Our Favorite Wall Street Love Stories

Boston Beer: Does Stock Momentum Outweigh Expensive Valuation?

Photo courtesy of AB InBev. 

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: Bernstein Trevor StirlingAnalyst Color Upgrades Price Target Analyst Ratings Best of Benzinga

Latest Ratings

GDWolfe ResearchDowngrades
QRTEAB of A SecuritiesInitiates Coverage On
ABB of A SecuritiesDowngrades42.0
VCTRB of A SecuritiesUpgrades32.0
BSIGB of A SecuritiesUpgrades27.0
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