Anheuser-Busch InBev stock (NYSE: BUD) recently reported its Q4 results, surpassing consensus estimates with earnings of $0.88 per share and sales of $14.8 billion, compared to expectations of $0.63 per share and $14.4 billion. Improved pricing trends were the primary driver behind the company’s strong Q4 performance. Separately, Should You Buy AVGO Stock After A 7% Fall In Chip Sell-Off?
Following the announcement, BUD stock surged 7%. However, despite this positive reaction, the stock has underperformed the S&P 500 index since the beginning of 2024, declining 8% compared to the S&P 500’s 28% increase. This underperformance is largely due to falling volumes and weak consumer demand in China, which have affected the company’s financial and stock performance over the past year. If you are looking for an upside with a smoother ride than that of an individual stock, consider the High-Quality portfolio, which has outperformed the S&P and achieved returns exceeding 91% since inception.
BUD Sales Growth Led by EMEA Region
Anheuser-Busch InBev’s revenue of $14.8 billion represents a 3.4% year-over-year organic growth despite a 1.9% decline in overall volumes. Regional performance varied: North America revenue increased by 1.7%, Middle Americas by 6.6%, South America by 3.2%, EMEA by 8.7%, while Asia Pacific decreased by 10.9%. The overall volume decline of 1.9% was primarily driven by Asia Pacific, which experienced a 12.7% drop. The company continued to face soft consumer demand in China, with a 19% decline in volumes.
Anheuser-Busch InBev’s EBITDA margin improved by 216 basis points year-over-year to 35.3% in Q4, largely due to strong margin expansion in the Middle Americas, South America, and EMEA regions. The combination of higher revenues and margin expansion resulted in a 7% increase in earnings per share, reaching $0.88 in Q4. Looking ahead, BUD expects its EBITDA to grow between 4% and 8% in 2025.
Does BUD Stock Have Room For Growth?
BUD stock rose by 7% following the earnings release. However, its performance relative to the index over the last four years has been quite volatile. Returns for the stock were -13% in 2021, 0% in 2022, 9% in 2023, and -21% in 2024.
In contrast, the Trefis High Quality Portfolio, which consists of 30 stocks, is less volatile. It has comfortably outperformed the S&P 500 over the past four years. Why is that? As a group, the HQ Portfolio stocks have provided better returns with less risk compared to the benchmark index, offering a smoother ride, as evident in the HQ Portfolio performance metrics.
Given the current uncertain macroeconomic environment surrounding rate cuts and ongoing trade wars, could BUD face a situation similar to that in 2021, 2023, and 2024 and underperform the S&P over the next 12 months, or will it see a strong jump? We estimate Anheuser-Busch InBev’s valuation to be $69 per share, reflecting approximately an 18% upside from its current level of $59. Our forecast is based on a 19x P/E multiple for BUD and projected adjusted earnings of $3.63 per share for the full year 2025. This multiple represents a slight premium compared to the stock’s four-year average P/E ratio of 18x. We believe this modest increase in the valuation multiple is justified given the company’s rising sales and improving profitability.
While BUD stock appears capable of reaching higher levels, it is useful to compare how Anheuser-Busch InBev peersperform on key metrics. You will find other valuable comparisons for companies across industries at Peer Comparisons. Also, check out – Will XRP Price Rebound From Its 30% Fall?
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