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FINANCE

Has the Anheuser-Busch InBev stock hit rock bottom? Experts think it’s time to take advantage

The kerfuffle over Bud Light’s partnership with Dylan Mulvaney has driven sales down and Anheuser-Busch InBev stock. But now might be the time to buy.

Update:
Is AB InBev stock selloff overreaction to Bud Light boycott?

The conservative backlash and boycott to Bud Light partnering with Dylan Mulvaney, a transgender TikTok influencer, sent sales of the brand nosediving. Likewise, the stock price of parent company Anheuser-Busch InBev has plummeted as the controversy has dragged on since it began 1 April.

However, while Bud Light may permanently lose some of its customer base, the decreased sales of the brand only represent a tiny fraction of Anheuser-Busch InBev global sales. Aaron Back at the Wall Street Journal argues that “sober-minded investors” may be looking at an investment opportunity.

Has the Anheuser-Busch InBev stock hit rock bottom? Experts think it’s time to take advantage

Sales of Bud Light are down slightly less for the week ending May 27 at 23.9% from 2022 numbers compared to the week before when they were off 25.7% year-over-year. The rebounding sales trend is similar for other brands directly associated with Anheuser-Busch according to data from Bump Williams Consulting.

Sales had been declining in North America prior to people losing their heads over the TikTokers video, that was part of the reason for teaming up with Mulvaney, to attract new clientele. However, sales in other markets have been growing which means the boycott isn’t hurting the parent company’s bottom-line as much as its promoters imagine.

That’s because the Belgian multinational drink and brewing company owns many other brands across the globe. Worldwide, around one out of every four beers sold is produced by a brewer owned by the conglomerate. North America only accounts for less than 30% of global sales.

Over the first three weeks of April after the controversy began, the decline in sales of Bud Light only represented 1% of global sales by volume during that period for the company as a whole Anheuser-Busch InBev Chief Executive Michel Doukeris said in early May. But the company’s stock price is down by nearly a fifth as the kerfuffle has dragged on.

But when you look at what Wall Street thinks of the company, things haven’t budged much since the fiasco started with the number of analysts rating the stock a “buy” or “overweight” going from 19 to 18 while those that say “sell” is unchanged at three. Furthermore, the brewing giant’s stock is trading at 15.9 times forecast earnings for the next 12 months compared to its average multiple of more than 20 times over the last decade.

Should you buy now? Brett Arends at MarketWatch, like most others, sees the current maelstrom for Bud Light and AB InBev passing as people have short memories. But he doesn’t think it’s a “slam dunk” just yet.