Anheuser-Busch stock may have just hit bottom

Anheuser-Busch InBev NYSE: BUD is down about 4.25% just days after releasing its fourth-quarter and full-year 2023 earnings report on February 29, 2024. The move lower may be nothing more than a company delivering a so-so report at a time when investors were struggling. a sales mood.

The company’s revenue missed key revenue numbers by 7.4%. However, the company reported that full-year global revenue hit a record high of $59.4 billion.

The news becomes even more mixed when considering earnings per share (EPS), which came in at 82 cents. This was a 16% year-over-year decline. Full-year earnings also fell about 4%.

The company still has a problem with Bud Light

However, while revenue increased, volume declined in the fourth quarter and the full year. And from the company’s earnings call, it’s clear that Anheuser-Busch still has a problem with Bud Light. During the call, company CEO Michel Doukeris noted, “Our revenues (in North America) are down 9.5% this year with STW (sales to wholesalers) down 12.7 %, primarily due to declining Bud Light volumes.”

Both sides of the boycott are right

If you are unaware of why Bud Light and the boycott appear in the same article, a simple Internet search will inform you. No matter where you are personally, this has been a headwind for BUD stock for several quarters.

The company hopes its new advertising and its relationship with the National Football League (NFL) will help turn this headwind into a catalyst. The earnings report suggests there’s still work to be done for the Bud Light brand.

However, this is where it’s important to remember that Anheuser-Busch reported record global revenue. This is to remind you that the company has several brands. And consumers may not be aware that brands like Corona, Michelob Ultra or Stella Artois are also part of the Anheuser-Busch family.

Michelob Ultra is the official sponsor of the National Basketball Association and the Corona Cero (i.e. zero) brand is an official worldwide sponsor of the Olympic Games.

Should You Get Into BUD Stock?

Anheuser-Busch InBev is one of the iconic consumer staples stocks. As the company’s earnings report shows, the beer category, which makes up the majority of the company’s revenue, remains strong with or without Bud Light.

On the other hand, the buy/sell ratio among institutional investors was more than 2:1 in favor of selling. In fairness, this broke a streak of about eight quarters where buying outpaced selling.

The BUD stock chart also looks less than frothy. With the post-earnings pullback, the stock is back to where it was in April 2023, when the boycott began. Anheuser-Busch analyst ratings on MarketBeat suggest the stock could rise near 2021 highs over the next 12 to 18 months. And the company expects to turn the earnings story around in the next 12 months.

However, the company will likely need an interest rate cut or two for this to happen. Without this, consumers may value the product more than the stock.

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