Anheuser-Busch InBev's BUD Stock Surges Despite Bud Light Backlash

Anheuser-Busch InBev's stock rose 7% after reporting earnings that exceeded expectations, driven by strong performance from brands like Corona. Despite a backlash against Bud Light, the company's diversified portfolio helped offset the impact and drive overall growth.

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Bijay Laxmi
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Anheuser-Busch InBev's BUD Stock Surges Despite Bud Light Backlash

Anheuser-Busch InBev's BUD Stock Surges Despite Bud Light Backlash

Anheuser-Busch InBev's BUD stock climbed more than 7% on Friday after the company reported earnings that exceeded expectations, despite a 23.86% decline in its stock over the past five years. The beer giant's revenue and earnings growth were driven by strong performance from other brands in its portfolio, particularly Corona, even as its Bud Light brand faces a social media backlash and boycott.

Why this matters: The resilience of Anheuser-Busch InBev's stock despite the backlash against Bud Light highlights the company's ability to adapt to changing consumer preferences and navigate controversies. This development also underscores the importance of diversification in the beer industry, where consumer loyalty can shift quickly.

The company reported a 3% increase in revenue, despite a 1% decline in worldwide beer volumes. Anheuser-Busch's pricing power helped drive the revenue growth, even as the beer industry undergoes a massive transformation with consumers having more options, including craft beer.

Bud Light, once the undisputed king of beers, lost its title of best-selling light beer to Modelo in May 2023. The brand has been embroiled in controversy after partnering with transgender influencer Dylan Mulvaney, sparking calls for a boycott among some consumers. "Don't get it twisted," one analyst commented, noting that investors remain bullish about the company's overall prospects despite the Bud Light backlash.

Anheuser-Busch InBev's other brands, particularly Corona, have helped pick up the slack and drive growth. However, the company has fallen short of analysts' estimates in four of the last quarters. Looking ahead, analysts are calling for revenue growth of around 5% in the coming year.

BUD stock hit its 52-week high in January 2024 at $66.24. The company's dividend yield currently stands at 1.01%, with a P/E ratio of 26.98. Analysts have a consensus price target of $71.70 on the stock.

The surge in Anheuser-Busch InBev's stock following its better-than-expected earnings report highlights the company's resilience and the strength of its diversified brand portfolio. While Bud Light faces challenges, the beer giant's other brands are helping to offset the impact and drive overall growth, underscoring Anheuser-Busch InBev's position as a key player in the evolving beer industry.

Key Takeaways

  • Anheuser-Busch InBev's stock surged 7% after reporting earnings that exceeded expectations.
  • Revenue growth driven by strong performance from Corona and other brands, despite Bud Light backlash.
  • Company's pricing power and diversification helped offset 1% decline in worldwide beer volumes.
  • Bud Light lost its title of best-selling light beer to Modelo in May 2023 amid controversy.
  • Analysts expect 5% revenue growth in the coming year, with a consensus price target of $71.70.