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Here's How AB InBev (BUD) Looks Just Ahead of Q4 Earnings

Anheuser-Busch InBev SA/NV BUD, also known as AB InBev, is slated to release fourth-quarter 2022 earnings on Mar 2. The leading alcohol beverage company is likely to register year-over-year revenue growth when it reports fourth-quarter 2022 results.

The Zacks Consensus Estimate for AB InBev’s fourth-quarter revenues is pegged at $15.19 billion, suggesting 7% growth from the year-ago quarter’s reported number. For fourth-quarter earnings, the consensus mark is pegged at 72 cents per share, suggesting a 20% decline from the prior-year reported figure. The consensus estimate has moved down 2.7% in the past seven days.

For 2022 earnings, the consensus mark for earnings is pegged at $2.91, suggesting growth of 2.1% from the year-ago quarter’s reported figure. The consensus mark has moved down 0.7% in the past seven days. The Zacks Consensus Estimate for the company’s 2022 revenues is pegged at $58.25 billion, suggesting 7.3% growth from the prior-year quarter’s reported figure.

We expect the company’s fourth-quarter total revenues to increase 6.9% year over year to $15,179.8 million and the bottom line to decline 20.1% to 72 cents per share. For 2022, we estimate revenue growth of 7.4% to $58,298.8 million and earnings per share growth of 3.5% to $2.95.

In the last reported quarter, the company delivered an earnings surprise of 3.9%. Its earnings missed the Zacks Consensus Estimate by 8.8%, on average, in the trailing four quarters.

Anheuser-Busch InBev SA/NV Price and EPS Surprise

 

Anheuser-Busch InBev SA/NV Price and EPS Surprise
Anheuser-Busch InBev SA/NV Price and EPS Surprise

Anheuser-Busch InBev SA/NV price-eps-surprise | Anheuser-Busch InBev SA/NV Quote

Key Factors to Note

AB InBev’s top line has been reflecting continued business momentum, owing to relentless execution, investment in its brands and accelerated digital transformation. The company has been benefiting from its unique commercial strategy, a strong brand portfolio and investments in operation excellence. These have been aiding market share growth across most key markets. Continued resilience in the global beer category is also expected to have aided the fourth-quarter performance.

The company is anticipated to have retained strong business momentum in the fourth quarter on continued premiumization efforts and favorable industry trends. The company has been investing in a diverse portfolio of global, international, and crafts and specialty premium brands in its markets. Apart from the premium brands, BUD’s global brands lead the way in premiumization. These factors are likely to have boosted the company’s top line in the fourth quarter.

The rapid expansion of its digital platform and leveraging technology such as B2B sales and other e-commerce platforms have been the key drivers for BUD. The company has been witnessing an acceleration in the B2B platforms, e-commerce and digital marketing trends, aiding growth for the past few months. These are expected to have contributed significantly to the top and bottom lines in the to-be-reported quarter.

AB InBev has been steadfastly growing its Beyond Beer portfolio, including products like ready-to-drink beverages like canned wine and canned cocktails, hard seltzers, cider and flavored malt beverages. The Beyond Beer trend has recently been gaining popularity due to the rise in demand for low-alcoholic or non-alcoholic drinks. The company has been focused on expanding its Beyond Beer portfolio, which has also been aiding the top line.

BUD’s revenue-management initiatives and premiumization efforts are likely to have aided revenues per hl in the fourth quarter. Growth in the premium portfolio and the expansion of the Beyond Beer portfolio are expected to have driven volume gains in the to-be-reported quarter.

For 2022, AB InBev expects EBITDA growth of 6-8%. It anticipates revenue growth to be higher than EBITDA growth, driven by strong volume and pricing.

However, AB InBev’s bottom line is expected to have been marred by adverse currency translations, commodity cost inflation and higher supply-chain costs in some markets. Higher commodity costs have been mainly resulting from increased aluminum and barley prices. BUD’s presence across various countries exposes it to negative currency translations.

On the last reported quarter’s earnings call, management expected higher commodity costs to continue exerting pressure on input costs. The company also anticipated volatile foreign currency.

Higher cost of sales and SG&A expenses are likely to have weighed on the company’s gross and operating margins. Elevated supply-chain costs have been primarily driving higher SG&A expenses for the past few quarters.

Zacks Model

Our proven model doesn’t conclusively predict an earnings beat for AB InBev this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

AB InBev has a Zacks Rank #2 and Earnings ESP of -0.46%.

Stocks Poised to Beat Earnings Estimates

Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to deliver an earnings beat.

Brown-Forman (BF.B) has an Earnings ESP of +2.49% and currently carries a Zacks Rank of 2. The company is likely to register top and bottom-line declines when it reports third-quarter fiscal 2023 results. The consensus mark for BF.B’s quarterly revenues is pegged at $1.02 billion, which suggests a 1.8% decline from the figure reported in the prior-year quarter.

You can see the complete list of today’s Zacks #1 Rank stocks here.

The consensus mark for Brown-Forman’s quarterly earnings has moved been unchanged in the past 30 days at 47 cents per share. The consensus estimate for BF.B’s fiscal third-quarter earnings suggests a decline of 12.96% from the year-ago quarter’s reported figure. BF.B has delivered an earnings beat of 8.9%, on average, in the trailing four quarters.

General Mills GIS currently has an Earnings ESP of +2.44% and a Zacks Rank #2. GIS is likely to register top and bottom-line growth when it reports the third-quarter fiscal 2023 numbers. The Zacks Consensus Estimate for its quarterly revenues is pegged at $1.9 billion, which suggests growth of 7.95% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for General Mills’ quarterly earnings has moved up by a penny in the past seven days to 90 cents per share, suggesting growth of 7.1% from the year-ago quarter’s reported number. GIS has delivered an earnings beat of 8.7%, on average, in the trailing four quarters.

Vital Farms VITL currently has an Earnings ESP of +80.00% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports the fourth-quarter 2022 numbers. The Zacks Consensus Estimate for VITL’s quarterly revenues is pegged at $105.7 million, which suggests growth of 36.6% from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for Vital Farms’ quarterly earnings has moved up 150% in the past 30 days to 5 cents per share. The consensus estimate for VITL suggests 155.6% growth from a loss of 9 cents reported in the year-ago quarter. VITL has delivered an earnings beat of 58.3%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.

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