Anheuser-Busch InBev (NYSE:BUD) lost after UBS cut the brewer to sell, citing weakness in China and consumers reaching for spirits instead of beer.
The firm expects that Anheuser-Busch InBev will face sales pressure and FX headwinds in 2023-2024, which will only be partially offset by improved business in China.
"Our analysis suggests the beer category is unlikely to benefit from deceleration in premium and above spirits. That said, AB InBev’s offering in the value segment (e.g. Busch) can help mitigate the negative impact of downtrading on volume, at the expense of product mix," observed analyst Nik Oliver.
UBS cut its rating on BUD to Sell from Neutral and lowered its price target to €53 from €57.
The Seeking Alpha Quant Rating on BUD is Hold with low marks for valuation and growth holding back the overall quant score.
Anheuser-Busch InBev (BUD) has grown from a giant beer organization to the fourth-largest beverage company in the world, with 500 brands in over 100 countries at a market cap of $119.86 billion. This company is known for big moves, whether in record-breaking acquisitions, or marketing spending for mass events such as the Super Bowl or the World Cup. Through cost-cutting and its beyond-beer strategy, revenues remain high irrespective of the downward beer-drinking trend in the U.S. Although the stock price has declined by 46.23% in five years, over the last six months, it has rewarded investors with returns of 14.39%.
BUD shares declined $1.44, or 2.3%, Thursday morning to $60.44
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