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published in Blogs
Jul 30, 2018

Is Heineken's Brazil Conquest Squeezing Its Margins?

Heineken NV’s Brazil expansion is apparently pressuring its profit margins.

Last year, the Dutch brewing company bought the Japanese firm Kirin Holdings Co.’s Brazil business – an acquisition that established Heineken as Brazil’s second-largest brewer. Heineken is now apparently going hammer and tongs at bolstering its Brazil presence and competing with Anheuser-Busch InBev in the country.

Heineken’s marketing strategies and focus on sales growth is pushing up costs and squeezing its margins. The company expects its operating profit margin for the full-year 2018 to decline by about 20 basis points, amid its business expansion in Brazil and adverse moves in currency. Adjusted operating profit increased 1.3 percent to 1.75 billion euros ($2 billion) in the first half of the year, falling short of analysts’ estimates.

Related Ticker: BUD

BUD in downward trend: 10-day moving average crossed below 50-day moving average on February 23, 2024

The 10-day moving average for BUD crossed bearishly below the 50-day moving average on February 23, 2024. This indicates that the trend has shifted lower and could be considered a sell signal. In of 15 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .

Price Prediction Chart

Technical Analysis (Indicators)

Bearish Trend Analysis

The Momentum Indicator moved below the 0 level on March 18, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on BUD as a result. In of 84 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .

The Moving Average Convergence Divergence Histogram (MACD) for BUD turned negative on March 18, 2024. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 39 similar instances when the indicator turned negative. In of the 39 cases the stock turned lower in the days that followed. This puts the odds of success at .

BUD moved below its 50-day moving average on March 14, 2024 date and that indicates a change from an upward trend to a downward trend.

Following a 3-day decline, the stock is projected to fall further. Considering past instances where BUD declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .

The Aroon Indicator for BUD entered a downward trend on March 11, 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.

Bullish Trend Analysis

The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where BUD's RSI Oscillator exited the oversold zone, of 24 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .

The Stochastic Oscillator is in the oversold zone. Keep an eye out for a move up in the foreseeable future.

Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where BUD advanced for three days, in of 294 cases, the price rose further within the following month. The odds of a continued upward trend are .

BUD may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.

Fundamental Analysis (Ratings)

Fear & Greed

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 (1.466) is normal, around the industry mean (2.772). P/E Ratio (23.385) is within average values for comparable stocks, (29.463). Projected Growth (PEG Ratio) (2.623) is also within normal values, averaging (2.138). Dividend Yield (0.014) settles around the average of (0.024) among similar stocks. P/S Ratio (2.103) is also within normal values, averaging (5.287).

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 fairly steady price growth. BUD’s price grows at a lower 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 86, placing this stock worse than average.

Notable companies

The most notable companies in this group are Anheuser-Busch INBEV SA/NV (NYSE:BUD), Constellation Brands (NYSE:STZ), Molson Coors Beverage Company (NYSE:TAP).

Industry description

The alcoholic beverage market includes beer, wine, and spirits. From $230 billion in 2015, the industry has grown to around $250 billion by 2019. In recent years, alcoholic beverage makers have been looking to expand distribution and purchase channels, such as through online stores (e.g. e-commerce platform Drizly) and convenience stores. Anheuser-Busch In Bev and Diageo are major global alcoholic beverage companies, while U.S.-owned companies include Constellation Brands and Brown-Forman Corp. among several others.

Market Cap

The average market capitalization across the Beverages: Alcoholic Industry is 19.86B. The market cap for tickers in the group ranges from 2.66K to 19.33T. PBGDF holds the highest valuation in this group at 19.33T. The lowest valued company is WBEVQ at 2.66K.

High and low price notable news

The average weekly price growth across all stocks in the Beverages: Alcoholic Industry was -1%. For the same Industry, the average monthly price growth was -1%, and the average quarterly price growth was -8%. SNDL experienced the highest price growth at 12%, while VWE experienced the biggest fall at -31%.

Volume

The average weekly volume growth across all stocks in the Beverages: Alcoholic Industry was -23%. For the same stocks of the Industry, the average monthly volume growth was -28% and the average quarterly volume growth was -31%

Fundamental Analysis Ratings

The average fundamental analysis ratings, where 1 is best and 100 is worst, are as follows

Valuation Rating: 49
P/E Growth Rating: 72
Price Growth Rating: 50
SMR Rating: 72
Profit Risk Rating: 85
Seasonality Score: 20 (-100 ... +100)
View a ticker or compare two or three
BUDDaily Signal changed days agoGain/Loss if shorted
 
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A.I.Advisor
published price charts
A.I. Advisor
published General Information

General Information

a holding company whose subsidiaries manufactures and distributes alcoholic and non-alcoholic beverages

Industry BeveragesAlcoholic

Profile
Fundamentals
Details
Industry
Beverages Alcoholic
Address
Brouwerijplein 1
Phone
+32 16276111
Employees
154540
Web
https://www.ab-inbev.com
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BUD and

Correlation & Price change

A.I.dvisor indicates that over the last year, BUD has been loosely correlated with DEO. These tickers have moved in lockstep 48% of the time. This A.I.-generated data suggests there is some statistical probability that if BUD jumps, then DEO could also see price increases.

1D
1W
1M
1Q
6M
1Y
5Y
Ticker /
NAME
Correlation
To BUD
1D Price
Change %
BUD100%
-1.22%
DEO - BUD
48%
Loosely correlated
-1.88%
CCU - BUD
43%
Loosely correlated
-0.50%
ABEV - BUD
41%
Loosely correlated
+0.20%
STZ - BUD
34%
Loosely correlated
-0.47%
SAM - BUD
29%
Poorly correlated
-1.78%
More
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