Amid the controversy in the United States that entailed one of the most famous beer companies in the world and its resulting declining stock prices, analysts predict that things could be looking up for Anheuser-Busch InBev (NYSE: BUD), the parent company of Bud Light, suggesting this might be the time to invest.
Indeed, following the recent purchase of nearly $100 million worth of BUD stock by Bill Gates’s Foundation Trust, Vivian Azer, the managing director and senior research analyst at investment bank TD Cowen, has given the Anheuser-Busch InBev an “outperform” rating, effectively marking it as a buy, as of September 13.
According to Azer’s projections, Anheuser-Busch InBev could witness “outsized” earnings growth in the near future based on factors like the “Bud blues are old news,” i.e. the company overcoming the Bud Light controversy, as “the declines in the US are well understood” and are not showing any signs of further worsening.
Bud Light’s global market
On top of that, the company’s core markets are in Middle and South America, where beer sales and consumption are higher than in the US, which should facilitate higher profit margins thanks to the recent reduction in the prices of commodities in these regions.
In addition, AB InBev uses home-delivery services like Z Delivery in Brazil and TaDa in Latin America and South Africa, as well as the convenience store chain Modelorama in Mexico, which makes it easier to buy Bud Light through reducing the “transaction friction on the demand side.”
Finally, the Wall Street analyst explained that AB InBev’s “leading profit margins in global beer” could generate the money necessary for the company to reduce debt and assist in both the growth of its returns and opportunities for share buybacks.
BUD stock analysis
Meanwhile, the price of the Bud Light stock at press time stood at $56.87, recording a daily gain of 0.035%, an increase of 0.49% across the previous five days, adding up to the 2.01% advance on its monthly chart, as per the latest data retrieved on September 18.
Taking into account its technical analysis (TA), the support zone for BUD stock currently rests in the area between $44.51 and $55.55, while the shares are facing resistance between $57.33 and $67.09, the level they need to break out of to provide further strength.
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