Anheuser-Busch InBev (ABI:BB) Upgraded to Buy by Citi with New Price Target of €69.00
Citi recently upgraded Anheuser-Busch InBev (ABI:BB) from Neutral to Buy, setting a new price target of €69.00, up from the previous target of €61.00. Despite expected lower third-quarter volumes in the U.S. and a slowdown in Mexico, Citi believes Anheuser-Busch InBev will surpass its full-year 2024 organic EBITDA growth guidance of 4-8%. This is due to strong cost control measures in U.S. operations.
Citi also anticipates margin expansion for Anheuser-Busch InBev into 2025, citing adjustments in the company's U.S. operations to accommodate lower Bud Light volumes. Additionally, the potential for mid-term group margins to return to pre-pandemic levels is expected, driven by normalized cost of goods sold (COGS) and emerging market pricing dynamics.
Furthermore, Citi forecasts that Anheuser-Busch InBev's net debt to EBITDA ratio will drop below 3x by the end of the year. This could lead to a $1 billion buyback program announcement alongside the third-quarter results on October 31st, providing technical support for the stock in the coming months.
To reflect the positive outlook, Citi has initiated a Positive Catalyst Watch on Anheuser-Busch InBev, indicating higher confidence in the company's earnings deliverability for fiscal years 2024 and 2025 compared to its peers.
In conclusion, this upgrade by Citi suggests that Anheuser-Busch InBev is well-positioned for growth and profitability in the coming years. Investors may consider this information when making decisions about their investment portfolios, as the company's strategic initiatives and financial performance could impact their returns.
