Anheuser-Busch InBev (BUD) PT Lowered to $68.50 at Morgan Stanley, 'we see the US as now at an inflection point in terms of volumes'

Morgan Stanley analyst Sarah Simon lowered the price target on Anheuser-Busch InBev (NYSE: BUD) to $68.50 (from $70.00) while maintaining a Overweight rating.

The analyst comments "We update our estimates ahead of Q2 results to reflect latest scanner data and ontrade colour in a number of markets, including the US, Europe and China (where our local research team has made changes to their forecasts for the brewers). We also update for FX, which has deteriorated in respect of the Mexican peso and Brazilian real. Overall, we see the US as now at an inflection point in terms of volumes, and we expect a year-on-year improvement in H2. China has been softer than anticipated, with negative weather and flooding in several markets, which has also affected Q2 price/mix, although we see the premiumisation trend as intact on a medium-term basis. Latam remains relatively robust, albeit our estimates now reflect the Mexican peso depreciation and the negative impact on FY25 gross margins. While we nudge up our organic EBITDA growth estimate for FY24 from 9.5% to 9.6%, FX headwinds result in a 2% cut to EBIT and a 4% cut to underlying EPS."

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