Posted on 12/05/2024 1:46:00 AM PST by Cronos
Bud Light sales are never going to recover. And yet now is the time to buy shares of its brewer, Anheuser-Busch InBev, say analysts at Citi.
Analysts argue that the weakness in U.S. volumes — where Bud Light sales are deteriorating even after more than a year of a consumer boycott — are being offset by lower costs and ongoing strong margin expansion.
Bud Light sales first started to fall following a backlash to a social-media campaign with transgender influencer Dylan Mulvaney. Even more than a year removed from the eruption of the controversy, Bud Light sales are still deteriorating — down 8.1% year-over-year in the week ending Sept. 7, according to data from Nielsen.
But the Citi analysts said even as it expects U.S. sales to retailers to fall by 3% in the third quarter, it expects U.S. profit margins to improve by 250 basis points. The analysts say cost cutting will allow the company to recover $500 million of the lost $1.5 billion of Bud Light related profits.
The analysts aren’t all that bullish on earnings relative to consensus, forecasting 89 cents a share, vs. 91 cents on Wall Street. But they say tight cost control will allow the group to deliver on its 48% to 8% organic growth target for earnings before interest, tax, depreciation and amortization.
They also say that the company may announce a $1 billion buyback. And finally, they say the margin expansion is set to continue into next year, giving it more confidence in its ability to deliver on earnings in 2025 relative to peers.
The analysts opened what they called a “positive catalyst watch” ahead of the third-quarter results, upgraded the company to buy from neutral, and lifted its price target to €69 ($76.53) from €61.
(Excerpt) Read more at marketwatch.com ...
Both sales and purchase incidence decreased by about 32% in more Republican counties versus 22% in more Democratic counties.
The sales decline persisted for close to eight months, with sales and purchase incidence down by 32% in Q4 2023. Interestingly, the sales decline in Democratic counties became even larger over time, shrinking the gap between Republican and Democratic counties.
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Gives them a chance to rework Budlight into something more than carbonated water.
I’ve heard it said that it takes 4 times the cost to get lost customers than it does to retain them.
The new Blatz. They must be proud.
You lose a customer the same way you got him.
A boycott is an organized effort - what happened to Bud Light was mostly a response of general disgust with the stupidity of their advertising approach, and very little organized persuasion was needed to generate the response observed. The best analogy I can think of is “New Coke” - nobody needed to organize a “boycott” - consumers just said we have no use for this sh*t. But with Bud Light it was the advertising message, not the product that turned off their customers.
well said
Blatz is a beer to seek out!
Looks like A-B recovered some of the Bud-light losses by selling more Bud, Michelob Ultra and Bush.
And, they did cost cutting, likely layoffs.
Only a matter of time before before the MSM promotes a product with two homos in a shower shaving each other with Gillete products, going to work in a pink Jaguar and drinking Bud light in a gay bar that night.
I thought that’s what it was- carbonated water- because the beer itself sucks- pre and post trans BS...
I’m sorry- but all those beers on that graph suck- the Republican beers sucking more than the rat beers by a rat hair.
No.
Yuengling should be number 1 for that kind of beer. I like Heineken too.
Maybe Jaguar can do a promotional where they give a free case of Bud Light with every car purchased🥸
AB Inbev stock fell about $10 in the months following the mylvaney stuff. Rebounded fairly quick though. No sweat off AB Inbev. In fact, they could drop the Bud Light line completely and still be just fine.
Meanwhile, Jaguar says, “Hold my Bud Light.”
After the Bud Light fiasco, I discovered Yuengling and will not be moving back to Bud Light. Yuengling makes a really good beer.
Ha! I surely did not mean to insult good Blatz or its illustrious drinkers!
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