Anheuser-Busch (NYSE: $BUD) is the biggest brewing company in the US, with over 40% of the market share. It runs 12 breweries across the US and has another 20 worldwide. Its most popular brands include Bud Light, Budweiser, Busch, and Natural Light.
On Wednesday, 08 May 2024, before markets opened, Anheuser-Busch released its first quarter fiscal 2024 results to a positive market reaction.
Anheuser-Busch Releases Stellar First Quarter Results
In the first quarter, Anheuser-Busch reported 2.6% organic growth in revenue to $14.547 billion, above estimates of $14.416. Net income grew 15.2% Y/Y to $1.509 billion for an underlying EPS of $0.75, above estimates of $0.67.
Organic volumes declined 0.6%, with beer and non-bear volumes declining 1.3% and 3.5%, respectively. Meanwhile, revenue per hl increased by 3.3% in the quarter.
The company’s gross profits experienced 2.7% organic growth to $7.89 billion, while the gross margin expanded to 54.3%. Its Q1 normalized EBITDA expanded 5.4% organically to $4.9 billion, while the margin expanded 90 basis points to 34.3%.
Q1 Highlights
The company’s digitization efforts have paid off, and they now have digital relationships with over 6 million customers globally. As of the end of Q1, their BEES digital platform was live in 26 markets, accounting for around 70% of the revenue captured via B2B digital platforms.
At the end of Q1, the BEES platform had 3.6 monthly active users and captured $11.3 billion in gross merchandise value, registering a growth of 16% and 23%, respectively, compared to Q123.
BEES Marketplace is live in 19 of its markets and generated 7.3 million orders and $465 million in gross merchandise value from the sale of third-party products, an increase of 35% and 47%, respectively, compared to Q123.
The company’s Beyond Beer business also performed well in the quarter, contributing around $350 million of revenue, a single-digit increase compared to Q123.
Regarding international growth, the number of consumers buying their brands grew in around 40% of their markets. Female consumers led growth across the important markers of Europe and Latin America.
Fiscal 2024 Guidance
In fiscal 2024, Anheuser-Busch expects EBITDA to grow while net capital expenditures are expected to reach $4-4.5 billion for the full year.
Stock Performance
Following the stellar Q1 results, Anheuser-Busch stock rose 4.08% during the morning trading session on Wednesday to $63.04 as of 09:39 AM EDT.
As of Tuesday’s closing price, the stock was down 4.33% since the start of the year and 4.97% in the past 52 weeks compared to the 25.38% gain of the SPX. The stock has lost 24.96% of its value in the past five years.
Its current price is above the 50 DMA of $60.25 and the 200 DMA of $59.59. Short sellers held 2.24M BUD shares, which is 0.11% of the shares outstanding, as of April 15, 2024.
Analysts’ Outlook on BUD Stock
Three analysts give BUD stock an overall moderate buy rating. They forecast a wide range for the stock, with a high of $80 and a low of $68.50. Based on the most recent price, their average price target of $74.25 represents a 17.54% upside.
Should You Add Anheuser-Busch to Your Portfolio?
The past years have been tough for Anheuser-Busch. It has had to navigate changing consumer tastes and US cultural wars. The stock has lost nearly a quarter of its value in the past five years, and there is no clear path to recovery.
However, its revenue has stabilized and has been growing after taking a hit in 2020, and it has seen growth in international markets. Additionally, the company is optimistic about revenue figures in fiscal 2024. Consequently, adding BUD stock to your portfolio could potentially be a great long-term strategy.
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