AB InBev Shares Up 26.2% in Past 3 Months: Should You Hold or Sell?

Anheuser-Busch InBev SA/NV BUD, alias AB InBev, has been doing well for a while, thanks to its robust strategic measures. The company’s pricing actions, continued premiumization and other revenue-management initiatives have been yielding.Over the past three months, BUD shares have gained 26.2%, comfortably outperforming the broader Consumer Staples sector and the Zacks Beverages - Alcohol industry’s growth of 3.3% and 0.5%, respectively. The stock also surpassed the S&P 500 index’s drop of 4.4% in the same period.AB InBev’s solid performance on bourses can be attributed to its sturdy performance in fourth-quarter 2024. The company’s revenues and earnings per share (EPS) beat the Zacks Consensus Estimate and improved year over year. Top and bottom-line growth reflected positive business momentum, owing to the strength of its diversified footprint and consumer demand for its megabrands.BUD Price PerformanceImage Source: Zacks Investment ResearchBUD’s Strategic Endeavors AidAB InBev is gaining from consumer demand for its brand portfolio. Its relentless execution, investment in brands and accelerated digital transformation have been driving BUD’s top-line momentum for a while. The company registered organic revenue growth of 3.4%, led by ongoing premiumization and higher revenue per hectoliter (hl), with revenue growth in 75% of its markets.AB InBev has been keen on making investments in its portfolio over the years and rapidly growing its digital platform, including BEES and Zé Delivery. Its digital transformation initiatives have been on track, with B2B digital platforms contributing about 75% to its revenues in 2024. Its omnichannel, direct-to-consumer ecosystem of digital and physical products generated $1.4 billion in revenues in 2024.BUD has been focused on expanding its Beyond Beer portfolio, which has also been aiding the top line. Notably, the Beyond Beer portfolio contributed 2% to total revenues in 2024, recording a low single-digit growth, driven by double-digit growth in key brands such as Cutwater, Nütrl and Brutal Fruit.The company’s premiumization strategy is a key growth opportunity. It has been investing to develop a diverse portfolio of global, international and crafts and specialty premium brands in its markets. The company’s above-core beer portfolio represented 35% of total revenues, registering low single-digit growth. Within the above-core brands, Corona led the performance with a low-teens revenue growth outside of Mexico, including double-digit volume growth in more than 30 markets.AB InBev Shows Higher Estimate RevisionsAnalysts seem quite optimistic about the company. The Zacks Consensus Estimate for BUD’s 2025 EPS has risen 1.9% to $3.73 in the past seven days. The consensus estimate for 2026 EPS has increased 2.2% to $4.18 in the aforementioned period.For 2025, the Zacks Consensus Estimate for BUD’s sales and EPS implies 1.6% and 5.7% growth, respectively, year over year. For 2026, the consensus mark for sales and EPS indicates a 3.7% and 12% year-over-year increase, respectively.Hurdles in BUD’s Growth StoryAB InBev continues to witness elevated costs from commodity cost inflation and higher supply-chain costs, and investments to support long-term growth. In addition, a tough macroeconomic environment is a concern.For 2025, AB InBev expects net pension interest expenses and accretion expenses to be in the band of $190-$220 million per quarter, based on currency and interest rate fluctuations.BUD’s ValuationGoing by the price/earnings ratio, AB InBev stock is currently trading at 16.30 on a forward 12-month basis, slightly higher than 15.40 for the industry. The stock is trading lower than its median of 16.73.ConclusionNevertheless, AB InBev’s strong execution, brand momentum and operational excellence position it for sustained growth. For 2025, the company expects year-over-year EBITDA growth in the band of 4-8%, in line with its medium-term outlook.Robust earnings estimate revisions further bode well for this Zacks Rank #3 (Hold) stock.Stocks to Consider in Consumer Staples SpaceThe Chef's Warehouse CHEF, which is a distributor of specialty food products in the United States, currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.CHEF has a trailing four-quarter earnings surprise of 34%, on average. The Zacks Consensus Estimate for CHEF’s current financial-year sales and EPS indicates growth of 5.7% and 17.7%, respectively, from the year-ago numbers.Post Holdings POST, which is a consumer-packaged goods holding company, has a Zacks Rank of 2 at present. POST has a trailing four-quarter average earnings surprise of 22.3%.The Zacks Consensus Estimate for Post Holdings’ current financial-year sales and EPS implies growth of 0.3% and 2.2%, respectively, from the year-ago numbers.Utz Brands UTZ, which has a diverse portfolio of salty snacks, currently carries a Zacks Rank of 2. UTZ has a trailing four-quarter earnings surprise of 8.8%, on average.The Zacks Consensus Estimate for Utz Brands’ current financial-year sales and EPS indicates growth of 1.2% and 10.4%, respectively, from the year-ago numbers.Zacks' Research Chief Names "Stock Most Likely to Double"Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.This top pick is among the most innovative financial firms. With a fast-growing customer base (already 50+ million) and a diverse set of cutting edge solutions, this stock is poised for big gains. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.Free: See Our Top Stock And 4 Runners UpWant the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis Report The Chefs' Warehouse, Inc. (CHEF): Free Stock Analysis Report Post Holdings, Inc. (POST): Free Stock Analysis Report Utz Brands, Inc. (UTZ): Free Stock Analysis ReportThis article originally published on Zacks Investment Research (zacks.com).Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks