AB Inbev: A palatable investment

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  Wolfgang Hagl
  Redaktor

Opinions differ when it comes to “Corona Extra”. Some love the Mexican lager as a thirst quencher, especially in summer, while others call it a sweet corn fizzy drink. What is certain is that Corona is already 100 years old. In 1925, the Cervecería Modelo brewery in Mexico City started operations and boiled down the recipe of water, barley malt, corn and hops for the first time. Since 2013, Grupo Model has been part of Anheuser-Busch InBev. Alongside Budweiser, Michelob Ultra and Stella Artois, Corona is one of the brewery group’s global blockbusters. According to a ranking by Kantar BrandZ, Corona is the most valuable beer brand in the world. Growth is enormous, with output increasing by almost 90 percent since 2018. Of course, the industry giant is also tapping into the trend towards non-alcoholic barley juice with this top product. In 2024, sales of “Corona zero” more than doubled.

Above expectations

In general, AB InBev is successfully combating a dwindling thirst for beer with its high-priced premium brands. While output shrank slightly last year, Group sales increased by 2.7% to a record USD 59.8 billion. The industry giant was even able to increase its operating result (normalized EBITDA) by 8.2% to just under USD 21 billion. Business in the home country of Corona is particularly profitable. In 2024, AB InBev achieved an EBITDA margin of 49.2% in the Central America region, which accounts for 38% of Group earnings. The figure for the company as a whole was 35.1%.

The current year has also got off to a good start. Although the more than 170 breweries once again delivered less beer overall, operating profit in the first quarter of 2025 was 7.9% higher than in the same period of the previous year. Analysts had expected an average increase of only 3.1%. “The consistent implementation of our strategy by our teams and partners enabled a solid start to the year and reinforces our confidence in achieving our forecast for 2025,” commented CEO Michel Doukeris on the interim report. Among other things, he is targeting organic EBITDA growth of 4% to 8% for the period as a whole.

Surprise possible

The Brazilian company is likely to confirm this outlook when it presents its figures for the second quarter of 2025 on July 31. Analysts expect organic sales growth of 3.6% on average for the past three-month period. The consensus forecast for the operating result is an increase of 5.9%. This would increase the EBITDA margin by 70 basis points to 35.3%. Richard Withagen, analyst at Kepler Cheuvreux, sees continued market share gains in the US, a solid performance in Latin America and the ongoing headwind from Asia, given the weakness in China, as key points for the upcoming reporting. He also expects AB InBev to outperform the overall market in Europe in terms of volume. With a new share buyback program, the group from Belgium could provide a positive surprise. A few days ago, AB InBev completed the USD 2 billion buyback program announced last autumn, which was originally scheduled to run for 12 months.

Investment Solution

Kepler Cheuvreux has confirmed its buy recommendation for the EURO STOXX 50 share and at the same time raised its price target by EUR 3 to EUR 67. A few days later, Morgan Stanley raised the target price by the same amount – the US bank now estimates the fair value of the share at EUR 72. From a technical perspective, AB InBev is separated from both price targets by massive resistance. There is a horizontal hurdle in the EUR 62 area, which the consumer stock has just bounced off. AB InBev’s first priority now is to maintain the upward trend that began at the start of the year. The 100-day line in the EUR 58 area could prove to be support here. With the mini future (ISIN BE0974293251), traders can position themselves on the long side in the run-up to the publication of the figures. The product, which is traded by UBS on the OTC platform Swiss DOTS, participates in rising AB InBev prices with a current leverage of 6.9. Caution: If the underlying asset turns down, there is a risk of a hangover – regardless of whether product holders are among the friends of Corona or reject the traditional stock.