AB InBev Stock Gains 9% in 3 Months: Should You Buy, Hold or Sell?

Anheuser-Busch InBev SA/NV BUD, alias AB InBev, has shown steady growth in the stock market, with its shares surpassing the broader industry and the S&P 500 in the past three months. This positive trend has been driven by the company's unwavering commitment to enhancing its brands through diverse beer offerings, aligning with the industry's shift toward premium products.AB InBev is well-positioned to benefit from the expansion of its Beyond Beer portfolio and its investments in B2B platforms, e-commerce and digital marketing in the near term.In the past three months, the company’s shares have risen 9%, leaving behind the industry peers and the broader S&P 500 index’s increases of 4.3% and 1.7%, respectively. The company also outperformed the broader Zacks Consumer Staples sector's growth of 8.2% in the same period.BUD’s Price Performance Image Source: Zacks Investment ResearchAt the current price of $64.85, the stock trades at a 3.9% discount to its 52-week high of $67.49. Additionally, BUD is trading above its 50 and 200-day moving averages, indicating robust upward momentum and price stability. This technical strength reflects positive market perception and confidence in AB InBev’s financial health and prospects.AB InBev Stock Trades Above 50 & 200-Day Moving Average Image Source: Zacks Investment Research Strategies Support BUD Stock’s RallyThe stock’s upward trajectory is well-supported by AB InBev’s distinctive commercial strategy, robust brand portfolio and focus on operational excellence. Key drivers include the company’s relentless execution, brand investments, premiumization efforts and accelerated digital transformation. Moreover, the expansion of the Beyond Beer portfolio and other revenue-management initiatives position the company for long-term growth.AB InBev sees premiumization in the beer industry as a major growth opportunity, investing in a diverse range of global, international and craft premium brands. Its global brands lead the premiumization trend, and the above-core portfolio has shown strong performance. In the second quarter of 2024, revenues for the above-core portfolio grew modestly, driven by solid performances by Corona and South African brands, and notable increases for Modelo in Mexico and Spaten in Brazil.The company is also enhancing its capabilities to connect with customers through its growing digital platform, which includes B2B sales and e-commerce platforms like BEES and Zé Delivery. The acceleration in B2B platforms, e-commerce and digital marketing is fueling top-line growth.AB InBev’s digital transformation is progressing well, with B2B digital platforms contributing about 70% to revenues in the second quarter of 2024. BEES had 3.8 million active users by the end of the second quarter and achieved $11.7 billion in gross merchandise value, marking a 20% year-over-year increase. Its omni-channel, direct-to-consumer ecosystem generated $140 million in revenues for the quarter.The company continues to expand its Beyond Beer portfolio, which includes ready-to-drink beverages, such as Canned Wine and Cocktails, Hard Seltzers, Cider and Flavored Malt Beverages. This trend aligns with rising demand for low-alcohol or non-alcoholic drinks, and contributed $375 million to total revenues in the second quarter of 2024.Upward Estimate Trajectory for BUDThe Zacks Consensus Estimate for BUD’s 2024 earnings per share rose 1.2% in the last 30 days. The upward revision in earnings estimates indicates analysts’ increasing confidence in the stock. Image Source: Zacks Investment Research For 2024, the Zacks Consensus Estimate for BUD’s sales and EPS implies 2.4% and 11.8% year-over-year growth, respectively. The consensus mark for 2025 sales and earnings indicates 3.4% and 10.8% year-over-year increases, respectively.BUD Stock UndervaluedThe company is currently trading at a discount to its industry on a forward 12-month P/E basis, making the stock an attractive pick for investors. AB InBev is currently trading at a forward 12-month P/E ratio of 17.75X, below the sector’s average of 18.25X and the S&P 500’s average of 21.19X. Image Source: Zacks Investment Research How to Play the Stock?AB InBev remains a powerhouse in the beverage industry, with more than 500 iconic brands under its belt. The company’s strategy of crafting a diverse brand portfolio that meets a wide array of consumer preferences, from pricing to flavor profiles and brand identity, bodes well. This strategic approach not only helps it tackle the pressures of rising commodity costs but also fuels its investments for sustainable long-term growth.The company's robust fundamentals highlight its strong financial health and operational efficiency. The upward price and estimates trajectory, combined with a relatively low valuation than peers, offers an attractive opportunity for investors looking to invest in this profitable beverage company. For current shareholders, we suggest staying with this Zacks Rank #3 (Hold) stock with solid long-term potential.3 Consumer Staples Stocks to ConsiderWe have highlighted three better-ranked stocks from the Consumer Staple sector, namely The Chef's Warehouse CHEF, Coca-Cola KO and Flowers Foods FLO.The Chef's Warehouse offers specialty food products in the United States. CHEF presently sports a Zacks Rank #1 (Strong Buy). It has a trailing four-quarter earnings surprise of 33.7%, on average. You can see the complete list of today’s Zacks #1 Rank stocks here.The consensus estimate for CHEF’s current financial year’s sales and EPS indicates growth of 9.7% and 12.6%, respectively, from the year-ago reported figures.Coca-Cola, the global beverage giant, currently has a Zacks Rank #2 (Buy). It has a trailing four-quarter earnings surprise of 4.7%, on average.The Zacks Consensus Estimate for KO’s current financial-year sales and earnings suggests growth of 0.6% and 6%, respectively, from the year-ago reported figures.Flowers Foods emphasizes providing high-quality baked items, developing strong brands, making innovations to improve capabilities and undertaking prudent acquisitions. It currently carries a Zacks Rank #2.The Zacks Consensus Estimate for FLO’s current financial-year sales and earnings indicates growth of 1% and 5%, respectively, from the year-earlier actuals. FLO has a trailing four-quarter earnings surprise of 1.9%, on average.Zacks Names #1 Semiconductor StockIt's only 1/9,000th the size of NVIDIA which skyrocketed more than +800% since we recommended it. NVIDIA is still strong, but our new top chip stock has much more room to boom.With strong earnings growth and an expanding customer base, it's positioned to feed the rampant demand for Artificial Intelligence, Machine Learning, and Internet of Things. Global semiconductor manufacturing is projected to explode from $452 billion in 2021 to $803 billion by 2028.See This Stock Now for Free >>Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report CocaCola Company (The) (KO): Free Stock Analysis Report Anheuser-Busch InBev SA/NV (BUD): Free Stock Analysis Report Flowers Foods, Inc. (FLO): Free Stock Analysis Report The Chefs' Warehouse, Inc. (CHEF): Free Stock Analysis ReportTo read this article on Zacks.com click here.Zacks Investment ResearchWeiter zum vollständigen Artikel bei Zacks Weiter zum vollständigen Artikel bei Zacks