Where Is Anheuser-Busch InBev Stock Headed After The Recent Rise?

by Trefis Team
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Anheuser-Busch InBev stock (NYSE: BUD) increased over 12% in the last six months (126 trading days) and currently trades close to $64. This rise was mainly due to expectations of higher volume in 2021 as the global lockdowns are gradually lifting, thus leading to easing of supply constraints. Additionally, with the vaccine rollout and live events slowly getting back on track in 2021, the company’s revenues and earnings are expected to see significant improvement in the coming quarters. But will BUD’s stock continue its upward trajectory over the coming weeks, or is a correction in the stock more likely?

According to the Trefis Machine Learning Engine, which identifies trends in a company’s stock price data for the last 20 years, returns for BUD stock average close to 3% in the next six-month (126 trading days) period after experiencing a 12% rise over the previous six-month (126 trading days) period. Notably, though, the stock is likely to underperform the S&P500 over the next six months, with an expected return which would be 4% lower compared to the S&P500.

But how would these numbers change if you are interested in holding BUD stock for a shorter or a longer time period? You can test the answer and many other combinations on the Trefis Machine Learning to test BUD stock chances of a rise after a fall and vice versa. You can test the chance of recovery over different time intervals of a quarter, month, or even just 1 day!

MACHINE LEARNING ENGINE – try it yourself:

IF BUD stock moved by -5% over 5 trading days, THEN over the next 21 trading days, BUD stock moves an average of 2 percent, which implies a return which is similar to that of the S&P500.

More importantly, there is 57% probability of a positive return over the next 21 trading days and 52% probability of a positive excess return after a -5% change over 5 trading days.

Some Fun Scenarios, FAQs & Making Sense of BUD Stock Movements:

Question 1: Is the average return for Anheuser-Busch InBev NV stock higher after a drop?

Answer:

Consider two situations,

Case 1: Anheuser-Busch InBev NV stock drops by -5% or more in a week

Case 2: Anheuser-Busch InBev NV stock rises by 5% or more in a week

Is the average return for Anheuser-Busch InBev NV stock higher over the subsequent month after Case 1 or Case 2?

BUD stock fares better after Case 1, with an average return of 7.4% over the next month (21 trading days) under Case 1 (where the stock has just suffered a 5% loss over the previous week), versus, an average return of 0.7% for Case 2.

In comparison, the S&P 500 has an average return of 3.1% over the next 21 trading days under Case 1, and an average return of just 0.5% for Case 2 as detailed in our dashboard that details the average return for the S&P 500 after a fall or rise.

Try the Trefis machine learning engine above to see for yourself how Anheuser-Busch InBev NV stock is likely to behave after any specific gain or loss over a period.

Question 2: Does patience pay?

Answer:

If you buy and hold Anheuser-Busch InBev NV stock, the expectation is over time the near term fluctuations will cancel out, and the long-term positive trend will favor you – at least if the company is otherwise strong.

Overall, according to data and Trefis machine learning engine’s calculations, patience absolutely pays for most stocks!

For BUD stock, the returns over the next N days after a -5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

Question 3: What about the average return after a rise if you wait for a while?

Answer:

The average return after a rise is generally lower than after a fall as detailed in the previous question. Interestingly, though, if a stock has gained over the last few days, you would do better to avoid short-term bets for most stocks.

BUD’s returns over the next N days after a 5% change over the last five trading days is detailed in the table below, along with the returns for the S&P500:

It’s pretty powerful to test the trend for yourself for Anheuser-Busch InBev NV stock by changing the inputs in the charts above.

While BUD stock may have moved a fair amount, 2020 has created many pricing discontinuities which can offer attractive trading opportunities. For example, you’ll be surprised how the stock valuation for Coca-Cola vs Merck shows a disconnect with their relative operational growth. You can find many such discontinuous pairs here.

 

See all Trefis Price Estimates and Download Trefis Data here

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