Anheuser-Busch InBev stock (NYSE: BUD) saw an impressive rise of almost 21% in the last six months (126 trading days) and currently trades at $69. 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. Demand for the company’s products mainly comes from restaurants, pubs, live events, etc. which have seen some reopening over the last few months. Though the recent spike in Covid cases is a concern, the successful vaccine rollout (which was not there during the first phase in 2020) has minimized the possibility of another strict global lockdown. 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 ten years, returns for BUD stock average close to 4% in the next three-month (63 trading days) period after experiencing a 21% rise over the previous six-month (126 trading days) period. Notably, though, the stock is likely to give returns in line with the S&P500 over the next three months.
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 one day!
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MACHINE LEARNING ENGINE – try it yourself:
IF BUD stock moved by -5% over five 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 58% probability of a positive return over the next 21 trading days and 52% probability of a positive excess return after a -5% change over five 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?
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 2% 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% 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?
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?
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.