Things to Decide the Fate of AB InBev (BUD) in Q3 Earnings
Anheuser-Busch InBev SA/NV BUD, also known as AB InBev, is slated to release third-quarter 2022 earnings on Oct 27. The leading alcohol beverage company is likely to register year-over-year revenue and earnings growth when it reports third-quarter 2022 results.
The Zacks Consensus Estimate for AB InBev’s third-quarter revenues is pegged at $15.12 billion, suggesting 6% growth from the year-ago quarter’s reported number. For third-quarter earnings, the consensus mark is pegged at 78 cents per share, suggesting a 56% increase from the prior-year reported figure. The consensus estimate has moved down 6% in the past 30 days.
In the last reported quarter, the company delivered an earnings surprise of 2.7%. Its earnings missed the Zacks Consensus Estimate by 2.4%, on average, in the trailing four quarters.
AnheuserBusch InBev SANV Price and EPS Surprise
AnheuserBusch InBev SANV price-eps-surprise | AnheuserBusch InBev SANV Quote
Key Factors to Note
AB InBev’s top line has been reflecting continued business momentum, owing to relentless execution, investment in its brands and accelerated digital transformation. The company has been benefiting from its unique commercial strategy, a strong brand portfolio and investments in operation excellence. These have been aiding market share growth across most key markets. Continued resilience in the global beer category is also expected to have aided the third-quarter performance.
The company is anticipated to have retained strong business momentum in the third quarter on continued premiumization efforts and favorable industry trends. The company has been investing in a diverse portfolio of global, international, and crafts and specialty premium brands in its markets. Apart from the premium brands, BUD’s global brands lead the way in premiumization. These factors are likely to have boosted the company’s top line in the third quarter.
The rapid expansion of its digital platform and leveraging technology such as B2B sales and other e-commerce platforms have been key drivers for BUD. The company has been witnessing an acceleration in the B2B platforms, e-commerce and digital marketing trends, aiding growth for the past few months. The company’s proprietary B2B platform, BEES, is live in 18 markets and has reached 2.9 million monthly active users. These are expected to have contributed significantly to the top and bottom lines in the to-be-reported quarter.
AB InBev is steadfastly growing its Beyond Beer portfolio, including products like ready-to-drink beverages like canned wine and canned cocktails, hard seltzers, cider, and flavored malt beverages. The Beyond Beer trend has recently been gaining popularity due to the rise in demand for low-alcoholic or non-alcoholic drinks. The company has been focused on expanding its Beyond Beer portfolio, which has also been aiding the top line.
BUD’s revenue-management initiatives and premiumization efforts are likely to have aided revenues per hl in the third quarter. Growth in the premium portfolio and the expansion of the Beyond Beer portfolio are expected to have driven volume gains in the to-be-reported quarter.
However, AB InBev’s bottom line is expected to have been marred by adverse currency translations, commodity cost inflation and higher supply-chain costs in some markets. Higher commodity costs have been mainly resulting from increased aluminum and barley prices. BUD’s presence across various countries exposes it to negative currency translations.
On the last reported quarter’s earnings call, management expected higher commodity costs to continue exerting pressure on input costs. The company also anticipated volatile foreign currency.
Higher cost of sales and SG&A expenses are likely to have weighed on the company’s gross and operating margins. Elevated supply-chain costs have been primarily driving higher SG&A expenses for the past few quarters.
Zacks Model
Our proven model doesn’t conclusively predict an earnings beat for AB InBev this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
AB InBev has a Zacks Rank #3 and Earnings ESP of -3.85%.
Stocks Poised to Beat Earnings Estimates
Here are some companies that you may want to consider, as our model shows that these have the right combination of elements to deliver an earnings beat.
e.l.f. Beauty ELF has an Earnings ESP of +7.58% and it currently sports a Zacks Rank of 1. The company is likely to register top-line growth when it reports third-quarter 2022 results. The consensus mark for ELF’s quarterly revenues is pegged at $105.7 million, which suggests 15.1% growth from the figure reported in the prior-year quarter.
You can see the complete list of today’s Zacks #1 Rank stocks here.
The consensus mark for e.l.f. Beauty’s quarterly earnings has moved up by a penny in the past 30 days to 15 cents per share. The consensus estimate for ELF’s third-quarter earnings suggests a decline of 28.6% from the year-ago quarter’s reported figure.
Chipotle Mexican Grill CMG currently has an Earnings ESP of +2.04% and a Zacks Rank #2. The company is likely to register an increase in the top and bottom lines when it reports third-quarter 2022 results. The consensus mark for CMG’s quarterly revenues is pegged at $2.23 billion, which suggests a rise of 14.4% from the figure reported in the prior-year quarter.
The Zacks Consensus Estimate for Chipotle’s third-quarter earnings has moved up by 0.2% to $9.11 per share in the past seven days. The consensus estimate for CMG indicates 29.8% growth from the $7.02 reported in the year-ago quarter.
Archer Daniels Midland ADM currently has an Earnings ESP of +4.06% and a Zacks Rank of 3. The company is likely to register an increase in the top and bottom lines when it reports third-quarter 2022 numbers. The consensus mark for ADM’s quarterly earnings has moved up 4.4% in the past 30 days to $1.42 per share. The consensus estimate suggests growth of 46.4% from the year-ago quarter’s reported number.
Archer Daniels’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $22.9 billion, which suggests a rise of 12.6% from the figure reported in the prior-year quarter.
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