Anheuser-Busch InBev stock pops on UBS upgrade

Anheuser-Busch InBev (BUD) shares are trading higher on Monday following a favorable upgrade from UBS. The financial services firm has raised its rating on the beverage giant to Buy from Neutral, citing several potential catalysts for the company, including margin growth and increased cash returns.

Morning Brief anchors Brad Smith and Madison Mills break down the details, providing insights into the company's ongoing restructuring efforts.

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This post was written by Angel Smith.

Video transcript

It's all uphill for Anheuser Busch.

According to U BS, the bank upgraded the stock to buy from neutral, citing an inflexion point in growth margins and cash returns as a catalyst.

Shares are moving higher this morning Here, you're seeing them up by about 3% on this.

This is a significant move here and more largely here.

As we're taking a look at shares of Bud over the course of this year.

This has been a company that's been trying to rebound from, of course, last year's debacle that took place where the company's messaging and then ultimate kind of, uh, see sawing within its own trying to figure out, OK, who is it going to market to ultimately created a lot of backlash for the company.

Um, I think for a lot of people they were trying to and for those who were at least open minded enough, seeing this as an attempts to try and bring in a new type of consumer demographic and consumer cohort, uh, into a relationship with the company, but ultimately did backfire in the way that they handled themselves as well.

Yeah, it's a really good point, Brad.

It was really sad to see the reaction to that, having said that that on terms of the stock performance, it is up the most that it has been up in the past seven weeks.

And when you take a look at the quote from this analyst saying over the next 12 months, they believe a B is at the cusp of delivering the ideal consumer staples growth profile, which it's never consistently achieved since pre 2008, namely consistent volume growth.

While pricing in line with inflation, margin expansion and straw cash conversion, they expect growth in Ida as well.

That is pushing the stock to the upside here off of that upgrade, which, as you mentioned, Brad, haven't seen that positive commentary on the stock in a little while here.