What’s Next For Anheuser-Busch InBev Stock?

BUD: Anheuser-Busch InBev logo
Anheuser-Busch InBev

The price of beer titan Anheuser-Busch InBev stock (NYSE: BUD) increased 11% in a month, while it is down 2% YTD. The company has seen a rebound in sales with the economies opening up globally. Earlier in 2020, the lockdowns resulted in a decline in beer sales, with many bars and restaurants closed. The North America region accounts for one-third of Anheuser-Busch InBev revenues, and it saw a 4% y-o-y rise in 2021, while the Asia Pacific saw the highest growth of 21%. This trend is expected to continue going forward as well.

The company, in late 2021, announced a surprise push into the world of biotech. Rather than giving away the malt barley byproducts of the beer brewing process, the company will instead turn these into plant-based proteins that can be sold to the food and beverage industry, bolstering the overall top-line growth. Earlier this month, the company asked its Russian partner to suspend its license to brew Budweiser in Russia, given the ongoing Ukraine crisis. Although the company doesn’t report its sales for Russia separately, they are likely to be very low, with minimal impact on its top line.

We estimate Anheuser-Busch InBev’s valuation to be $72 per share, reflecting a 16% upside from its current levels of $62. This represents a P/E multiple of 22x based on an expected EPS of $3.30 in 2022. But what about the near term? Now that BUD stock has seen a rise of 11% in a month, will it continue its upward trajectory, or is a fall imminent? Going by historical performance, there is a high chance of a rise in BUD stock over the next month. Out of 113 instances in the last ten years that BUD stock saw a twenty-one-day increase of 11% or more, 79 resulted in BUD stock rising over the subsequent one-month period (twenty-one trading days). This historical pattern reflects 79 out of 113, or about a 70% chance of a rise in BUD stock over the coming month. See our analysis on Anheuser-Busch InBev Stock Chance of Rise for more details.

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Calculation of ‘Event Probability’ and ‘Chance of Rise’ using the last ten years’ data

  • After moving 2.5% or more over five days- the stock rose on 53% of the occasions in the next five days.
  • After moving 3.0% or more over ten days, the stock rose in the next ten days on 46% of the occasions
  • After moving 10.6% or more over a twenty-one-day period, the stock rose on 70% of the occasions in the next twenty-one days.

This pattern suggests a higher chance of a fall in BUD stock over the next ten days, while it has higher chances of a rise in the next five days and the next month.

Anheuser-Busch InBev (BUD) Stock Return (Recent) Comparison With Peers

  • Five-Day Return: SAM highest at 2.7%; TAP lowest at -2.4%
  • Ten-Day Return: DEO highest at 4.8%; TAP lowest at -1.1%
  • Twenty-One Days Return: BUD highest at 10.6%; KO lowest at -0.0%

While BUD stock may see higher levels, the Covid-19 crisis has created many pricing discontinuities, which can offer attractive trading opportunities. For example, you’ll be surprised how counter-intuitive the stock valuation is for Molson Coors Brewing vs. Entergy.

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

 Returns Apr 2022
MTD [1]
YTD [1]
Total [2]
 BUD Return 3% 2% -41%
 S&P 500 Return 1% -4% 105%
 Trefis MS Portfolio Return 2% -5% 272%

[1] Month-to-date and year-to-date as of 4/5/2022
[2] Cumulative total returns since the end of 2016

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