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Anheuser-Busch stock down after Jefferies downgrades the Budweiser brewer

Yahoo Finance Live anchors discuss a Jefferies analyst’s decision to downgrade Budweiser brewer Anheuser-Busch from Buy to Hold.

Video Transcript

[AUDIO LOGO]

BRIAN SOZZI: Shares of Anheuser-Busch are in focus this morning, after a Jefferies analyst downgraded the beer maker from buy to hold. And lower it's-- lowered its price target down to $54 from $68, saying that the beer stock is not as cheap as it looks. And perhaps it's not, Brad,

AB InBev, of course, is still dealing with rising costs of doing business, whether it's barley. It's also dealing with canned shortages. It's not an AB InBev thing. It's a broader industry environment or food industry thing. But still, their top pick is Carlsberg and Heineken. So at least, the folks over at Jefferies are going long Heineken over Budweiser.

BRAD SMITH: Grab-- grabbing the Heines over the weekends, OK.

BRIAN SOZZI: Grabbing Heines.

BRAD SMITH: When we think about the entire sector, it really does come back to-- or this industry rather, comes back to the shift in some of the consumer tastes, too, that the pandemic has really set on. You saw less of the just standard consumption of beers that may have been on tap at your local watering hole and more of the shift towards some of the wines, some of the spirits, as well.

And we've seen in the wines and spirits category-- and also, I guess I have to give a nod to the fizzy drinks or the spiked canned drinks. So ultimately, with all of that shifting consumer profiles, what does that net out for the beer companies of the world? And have they made enough of a pivot in this near-term period, whether that be via acquisition or whether that be via something home grown, in order to retain that consumer appetite, too?

BRIAN SOZZI: And here's today's deep thought, if we were going into a recession, wouldn't you trade down to Budweiser and Bud Light? Isn't that the cheaper beer relative to a Heineken? Isn't Heineken more expensive?

BRAD SMITH: If we're--

BRIAN SOZZI: If you have some money, you're going Heineken. You're not rolling up with a Budweiser.

BRAD SMITH: I think in a recession, I just want the hardest thing I can get in my hands-- [LAUGHS]

BRIAN SOZZI: The hardest thing. [LAUGHS] That's so-- [LAUGHS]

BRAD SMITH: --in the liquor space.

BRIAN SOZZI: Wow.

BRAD SMITH: Well, guys, coming up on the other side of this short break, Yahoo Finance's Ines Ferré will break down the latest market action, as fears surrounding the extensive Fed-tightening persists. That's next.

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