Brewing giant Anheuser Busch InBev (NYSE:BUD) will report third-quarter financial results before the market hours on Friday, October 25. Analysts expect the Budweiser-parent to report a year-over-year increase in earnings and revenues in Q3.
Even as overall beer demand remains soft, popular brands such as Budweiser and Corona continue to see strength. Also, strength in the international markets is likely to offset any weakness in US sales. During the third quarter, total revenue is projected to increase 4% to $13.82 billion.
There has been a change in consumer preferences towards healthier drinks, primarily in the US, hurting sales of soda and beer. Anheuser Busch was forced to buy up numerous craft brewers over the past few years to maintain its market position in the beer industry.
Down the line, the Belgian firm is expected to report earnings of $1.16 per share, compared to 82 cents per share a year ago. In the trailing four quarters, Anheuser Busch has exceed market consensus on earnings on two occasions.
During the last-reported quarter, the company reported better-than-expected revenues and income, sending the stock higher.
Meanwhile, better revenues and income may not, in itself, satiate the thirst of investors. The market will also be looking at the brewer’s balance sheet, which is not among its strong points. Post the SAB Miller acquisition last year, the company had incurred significant debts, which later forced it to slash its dividends. Investors will need more clarity on the advantages of holding on to a stock with unstable dividends.
BUD shares have increased 38% in the year-to-date period. It’s 12-month average price target of $103.67 is at a 13% upside from Wednesday’s trading price.
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