RBC Capital Markets upgraded its recommendation of beverage maker AB InBev, following the latter’s debt refinancing.
Shares of the world’s biggest beer company got upgraded to a top pick rating by RBC analyst James Edwardes Jones. Jones indicated that AB InBev’s debt is under control, especially after the company refinanced parts of it.
After AB InBev borrowed a record $75 billion to buy SABMiller in 2016, the former’s debt level peaked at $100 billion. In January, AB InBev issued $15.5 billion in corporate bonds to pay off some of the debt due for repayment between 2021 and 2024 as well as 2026. Jones said, "The recent refinancing was sensible," and added, "It has replaced peaks of debt repayment with a smoother schedule which, at current exchange rates, should be doable from free cash flow, while significant appreciation in the US$ would be manageable."
Jones also suggested that AB InBev’s valuation should be gauged by its price-to-earnings ratio (which is relatively less expensive in this case) versus its enterprise value/EBITDA (relatively expensive) ratio. He cited the beer company’s non-cyclicality as a reason.
Last year, AB InBev’s stock prices suffered declines, apparently due to concerns over the company’s decreasing beer sales coupled with its burgeoning debt.
The RSI Indicator for BUD moved out of oversold territory on April 18, 2024. This could be a sign that the stock is shifting from a downward trend to an upward trend. Traders may want to buy the stock or call options. The A.I.dvisor looked at 25 similar instances when the indicator left oversold territory. In of the 25 cases the stock moved higher. This puts the odds of a move higher at .
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The Moving Average Convergence Divergence (MACD) for BUD just turned positive on April 23, 2024. Looking at past instances where BUD's MACD turned positive, the stock continued to rise in of 40 cases over the following month. The odds of a continued upward trend are .
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The Aroon Indicator for BUD entered a downward trend on April 22, 2024. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is fair valued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: P/B Ratio (1.471) is normal, around the industry mean (3.776). P/E Ratio (23.500) is within average values for comparable stocks, (28.896). BUD's Projected Growth (PEG Ratio) (0.970) is slightly lower than the industry average of (2.099). Dividend Yield (0.014) settles around the average of (0.024) among similar stocks. P/S Ratio (2.114) is also within normal values, averaging (7.800).
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to consistent earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. BUD’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. BUD’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 89, placing this stock worse than average.
The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows
a holding company whose subsidiaries manufactures and distributes alcoholic and non-alcoholic beverages
Industry BeveragesAlcoholic