AB InBev No easy summer for Bud Light
The impact from the recent media storm around Bud Light is showing some signs of stabilization with ABI's US volumes down an estimated c. 14% y/y in 2Q. ABI has meanwhile launched a large summer marketing campaign for Bud Light under the tagline ‘Easy to Summer'. Whilst we have been a bit hesitant to change our forecasts given limited visibility on the lasting impact of this media storm, we have now decided to use the 2Q US run rate also for the following quarters. Taking into account negative operating leverage effects for the North American zone, we have lowered our FY23 EBITDA organic growth forecast from 6.6% to 2.3%, which is below the company's guidance of 4-8% organic growth. Despite the tougher short term momentum, we still appreciate ABI for its leadership positions in the global beer market, high intrinsic profitability and LT growth prospects in its emerging markets businesses. Deleveraging is still on track and with valuation multiples attractive, we maintain our BUY rating, albeit with a target price lowered from € 80 to € 75.Anheuser-Busch Inbev is engaged in the brewing of beer. Co. manages a portfolio of well over 200 brands that includes brands such as Budweiser, Stella Artois and Beck's; multi-country brands such as Leffe and Hoegaarden; and other brands such as Bud Light, Skol, Brahma, Quilmes, Michelob, Harbin, Sedrin, Klinskoye, Sibirskaya Korona, Chernigivske and Jupiler. Co. also produces and distributes soft drinks, particularly in Latin America. Co.'s operations are organized along seven business segments: North America, Mexico, Latin America North, Latin America South, Europe, Asia Pacific and Global Export & Holding Companies.
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