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Bear Of The Day: AnheuserBusch InBev (BUD)

·2 min read

AnheuserBusch InBev (BUD) is a Zacks Rank #5 (Strong Sell) despite beating the number in the most recent earnings release. If we are in fact headed into a recession, then people are likely to have . Let’s look at why this stock is a Zacks Rank #5 (Strong Sell) and in this Bear of the Day article.

Description

Anheuser-Busch InBev, alias AB InBev, is a global brewing company with more than 500 iconic brands. The company’s leading position in majority of its markets and a strong global footprint lends the advantage of economies of scale and growing its multi-country brands globally. Its strategy is based on efforts to develop a portfolio of brands that cater to extensive consumer needs within the market, in terms of price range, flavor profiles, and brand meaning.

Earnings History

When I look at a stock, the first thing I do is look to see if the company is beating the number. This tells me right away where the market’s expectations have been for the company and how management has communicated to the market. A stock that consistently beats has management communicating expectations to Wall Street that can be achieved. That is what you want to see.

In the case of BUD, I see two straight beats which preceeded two straight misses of the Zacks Consensus Estimate. This alone does not make the stock a Zacks Rank #1 (Strong Buy) and it doesn’t make it a Zacks Rank #5 (Strong Sell) either.

The Zacks Rank does care about the earnings history, but it is much more heavily influenced by the movement of earnings estimates.

Earnings Estimates

The Zacks Rank tells us which stocks are seeing earnings estimates move higher or in this case lower. For BUD I see annual estimates moving lower.

The Zacks Rank is more heavily influenced by the move in the annual numbers, and the movement is mixed for those numbers.

The current year 2022 consensus number has dropped from $3.16 to $3.07.

The next year has dropped from $3.66 to $3.41 over the last 60 days.

Negative movement in earnings estimates like that is why this stock is a Zacks Rank #5 (Strong Sell).

It should be noted that a majority of stocks in the Zacks universe are seeing positive earnings estimate revisions. That means that the stocks that are seeing small but negative earnings estimate revisions are falling to a Zacks Rank #5 (Strong Sell).

Chart

AnheuserBusch InBev SANV Price, Consensus and EPS Surprise

AnheuserBusch InBev SANV Price, Consensus and EPS Surprise
AnheuserBusch InBev SANV Price, Consensus and EPS Surprise

AnheuserBusch InBev SANV price-consensus-eps-surprise-chart | AnheuserBusch InBev SANV Quote


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