What’s Behind Anheuser-Busch InBev Stock’s Recent Decline?

by Trefis Team
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Anheuser-Busch InBev stock (NYSE: BUD) has seen a decline of more than 7% in the last one month and currently trades at $69 per share. The fall has been driven by concerns of a slowing hard seltzer market. Also, the global trend has been toward smaller craft breweries and away from cheaper light beers. Additionally, the demand for beer has been falling while other types of alcohol (spirits) are becoming popular. Thus, BUD’s dependence on light beers for a major part of its sales is not ideal in the current environment. But will BUD’s stock continue its downward trajectory over the coming weeks, or is a recovery 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 3% in the next three-month (63 trading days) period after experiencing a 7% drop over the previous one-month (21 trading days) period. Also, the stock has a 64% probability of giving positive returns 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!

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 2.2 percent, with 60% probability of a positive return.

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 2.2% 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 0.3% 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 5 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 understandably 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 5 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.

What if you’re looking for a more balanced portfolio instead? Here’s a high-quality portfolio that’s beaten the market since 2016.

 

See all Trefis Price Estimates and Download Trefis Data here

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