Mixed Q3 Results for Anheuser-Busch InBev: Volume Decline Hits Stock Performance

Anheuser-Busch InBev stock (NYSE: BUD) has released its Q3 results, revealing a drop in revenues while earnings surpassed expectations. The company reported revenue of $15.05 billion and adjusted earnings of $0.98 per share, compared to estimates of $15.57 billion and $0.89, respectively. Despite beating earnings forecasts, BUD stock fell approximately 8% following the results announcement due to a notable decrease in volume.

Revenue Insights

In Q3, Anheuser-Busch InBev achieved revenues of $15.05 billion, marking a 2.1% increase compared to the previous year. Breaking down the results by region, North America saw a revenue rise of 1.5%, Middle Americas increased by 1.9%, South America rose by 5.6%, and EMEA climbed by 8.2%. Conversely, Asia Pacific faced a 9.5% decline. Overall, volume dropped by 2.4%, primarily driven by the downturn in Asia Pacific. This decrease was unexpected, as the market forecast anticipated slight growth. Management attributed the decline to weakened consumer demand in China and Argentina. Nevertheless, the company did improve its EBITDA margin by 110 basis points to 36.0% in Q3, with the net profit of $0.98 reflecting a 14% increase year-over-year.

Stock Performance and Valuation

The disappointing volume figures sparked investor concern, evident in the 8% drop in stock price after the results were shared. Analysts estimate Anheuser-Busch InBev’s valuation at $68 per share, suggesting about a 15% upside from the current price of $59. This projection is based on a 20x P/E multiple for BUD and expected earnings of $3.32 per share, adjusted for the full year 2024. The 20x multiple reflects the stock’s average over the last three years. However, a sustained decline in volume may necessitate a reevaluation of BUD’s valuation multiple.

Comparative Stock Analysis

Year-to-date, BUD stock has dropped 9%, underperforming the broader markets, including a 20% rise in the S&P 500 index. Evaluating the stock’s performance over recent years reveals volatility: returns were -13% in 2021, -1% in 2022, and 8% in 2023. In contrast, the Trefis High Quality (HQ) Portfolio—comprising 30 stocks—has consistently outperformed the S&P 500 on an annual basis. This portfolio tends to offer better returns with less risk, leading to more stable performance metrics.

Looking Ahead

Despite potential for BUD stock to reach higher levels, it remains important to assess how Anheuser-Busch InBev’s peers perform against key metrics. For additional insights and comparisons across industries, check out the Peer Comparisons section.

[1] Returns as of 11/5/2024
[2] Cumulative total returns since the end of 2016

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.