Anheuser-Busch InBev (AB InBev) (JSE: ANH), the world’s leading brewer renowned for iconic brands like Stella Artois and Budweiser, continues to navigate dynamic market landscapes with resilience and innovation. Despite challenges, the first quarter of 2024 showcased remarkable performance, underscoring AB InBev’s strategic prowess and steadfast commitment to growth.
With a 2.6% increase in total revenue, reaching $14.55 billion, and a 5.4% rise in normalized EBITDA to $4.99 billion, AB InBev demonstrates consistent execution of its strategy, accompanied by margin expansion. This achievement is further exemplified by a 15% growth in underlying earnings per share (EPS), reflecting the company’s unwavering focus on shareholder value.
While total volume experienced a slight decline of 0.6%, AB InBev’s diversified global footprint and the enduring appeal of its megabrands, notably Corona, contributed to a 6.7% increase in combined revenues outside its home market. Moreover, the company’s digital initiatives, including B2B platforms and direct-to-consumer ecosystem, generated approximately $130 million in revenue, showcasing its adaptability to evolving consumer preferences.
Looking forward, AB InBev remains optimistic, expecting EBITDA growth to align with its medium-term outlook of 4-8%, underpinned by prudent financial management and a resilient operational framework. As the beverage industry continues to evolve, AB InBev stands poised to lead with innovation, agility, and a steadfast commitment to delivering shareholder value.
Technical
Following AB InBev’s earnings announcement, its share price experienced a notable surge of 5%, marking a significant turnaround in its recent trading pattern.
Prior to the earnings release, the stock had been in a downtrend, trading below the 100-day moving average and within a descending channel pattern. However, the earnings beat sparked a bullish rally, leading to a breakout above the descending channel pattern and crossing over the 100-day moving average.
Notably, support was established at R1087.48 per share, preventing further downside pressure during the downtrend. Currently, the share price hovers near the resistance level at R1196.33 per share, a two-month high. However, overbought conditions indicated by the RSI suggest caution. Moving forward, if upside momentum persists, a full retest of the resistance level is plausible. Conversely, a resurgence in downside momentum could lead to a downturn, potentially testing the 100-day moving average.
Summary
AB InBev’s robust Q1 performance reflects its resilience amid challenges, with revenue growth of 2.6% and a surge in EBITDA. The stock’s bullish rally post-earnings, breaking above key technical levels, signals positive sentiment. However, caution is advised with overbought conditions, while a potential upside could retest resistance at R1196.33.
Sources: Anheuser-Busch InBev SA/NV, Reuters, MoneyWeb, TradingView
Piece Written By Nkosilathi Dube, Trive Financial Market Analyst
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