shares are tumbling for a second day on Friday, after Thursday’s better-than-expected earnings report, but fell short of expectations on guidance.
Belgian brewing giant Anheuser-Busch, which owns brands including Budweiser, Stella Artois, and Corona, posted adjusted profit of 95 cents per American depositary receipt, beating forecasts for 83 cents, on sales of $13.54 billion, in line with analyst expectations. The company’s management, however, headed by new CEO Michel Doukeris, did not raise guidance, and reiterated that normalized earnings before interest, taxes, depreciation, and amortization (Ebitda) would increase 8%-12% for the year. That was enough to knock the ADRs down 5.6% on Thursday.
Anheuser-Busch had a strong first-quarter sales beat, but its ADRs has been declining since June and is now down 10% in 2021.
That drop appears too drastic to RBC Capital analyst James Edwardes Jones, who called the guidance “prudent…the decline in ABI’s shares price has been overdone,” he continued. He maintained an Outperform rating and a price target of $76 on the ADRs, implying 20.7% upside. He believes that despite concerns over commodity price increases, one reason for the lack of a guidance increase, investors should put them aside for the remainder of the year.
CFRA Research analyst Andrew Tam, who rates the ADRs at Hold, notes that “the result was in line with the street but investors were looking for more, disappointed there was no guidance upgrade.” He lowered his price target to $70 from $71, but raised his earnings-per-ADR estimates for the year to $3.08 from $2.88.
The market appears to agree with Tam, at least for now. Anheuser-Busch ADRs are down 2.5% in recent trading to $63.16 Thursday. The
S&P 500 index
is down 0.5%.
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