Anheuser-Busch InBev Upgraded to Buy by Citi with New Price Target of €69.00
Anheuser-Busch InBev (ABI:BB) (NYSE:BUD) received a Buy rating upgrade from Citi, with a new price target of €69.00, up from €61.00. Despite expected lower third-quarter volumes in the U.S. and a slowdown in Mexico, Citi believes the company will outperform its full-year 2024 organic EBITDA growth guidance of 4-8% due to strong cost control measures in the U.S. operations.
Citi also anticipates margin expansion into 2025, with adjustments made to account for permanently reduced Bud Light volumes in the U.S. and potential for mid-term group margins to return to pre-pandemic levels. The financial institution forecasts Anheuser-Busch InBev's net debt to EBITDA ratio to fall below 3x by year-end, possibly leading to a $1 billion buyback program announcement alongside third-quarter results on October 31st.
To reflect the positive outlook, Citi has initiated a Positive Catalyst Watch on Anheuser-Busch InBev, indicating higher confidence in the company's earnings deliverability compared to peers. This upgrade suggests a bullish sentiment towards the stock and potential growth opportunities for investors.
In conclusion, the upgrade from Citi signals a positive outlook for Anheuser-Busch InBev, with expectations of improved financial performance and potential stock price appreciation. Investors may consider this news as an opportunity to capitalize on the company's growth prospects and future profitability.