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Here's How AB InBev (BUD) is Placed Ahead of Q4 Earnings

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Anheuser-Busch InBev SA/NV (BUD - Free Report) , also known as AB InBev, is slated to release fourth-quarter 2020 results on Feb 25. The leading alcohol beverage company is likely to register year-over-year bottom-line growth when it reports fourth-quarter fiscal 2020 results. The Zacks Consensus Estimate for AB InBev’s fourth-quarter earnings is pegged at $1.26 per share, suggesting significant growth from 48 cents reported in the year-ago quarter. The consensus estimate has been unchanged in the past 30 days.

For fourth-quarter revenues, the consensus mark is pegged at $12.38 billion, suggesting a 7.2% decline from the prior-year reported figure.

In the last reported quarter, the company delivered an earnings surprise of 8.2%. However, its earnings missed the Zacks Consensus Estimate by 21.5%, on average, in the trailing four quarters.

AnheuserBusch InBev SANV Price and EPS Surprise

 

AnheuserBusch InBev SANV Price and EPS Surprise

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

Key Factors to Note

After the slowdown due to the pandemic, AB InBev has been witnessing revived trends reflected by strong volume growth and revenues per hectoliter reported in the third quarter. The robust volume trend is likely to have aided the top line in the fourth quarter. Further, the company has been witnessing continued strength in the premiumization trend, which coupled with its fundamental strength and continued resilience in the global beer category helped AB InBev to deliver better-than-expected results in the third quarter. The persistence of the trend is likely to have aided fourth-quarter performance.

Additionally, the company’s investment in B2B platforms, e-commerce channels and digital marketing has accelerated in the past few months, which is expected to have boosted top and bottom-line growth in the to-be-reported quarter.

Furthermore, the company has been witnessing strong volume and top-line growth in the United States and China. Growth in the United States is expected to have benefited from its robust commercial strategy in the fourth quarter. Moreover, revenue per hl in the United States is likely to have benefited from its revenue-management initiatives and positive brand mix, stemming from the robust performance of the seltzer brands. Also, market share gains due to continued strength in Bud Light Seltzer and Michelob Ultra are likely to have aided performance in the fourth quarter.

Positive trends in China are likely to have resulted from the ongoing recovery in the market, mainly in the on-premise channel. Also, improving channel mix, strength in the e-commerce business and continued premiumization are expected to have aided fourth-quarter performance in China. Moreover, the company has been witnessing a higher market share within brewers in the relevant in-home channel in China. This is expected to get reflected in the region’s top-line results for the fourth quarter.

However, the company has been witnessing cost headwinds due to supply-chain adjustments adapted to meet the evolving demand, which is likely to have impacted margins in the fourth quarter.

Zacks Model

Our proven model doesn’t conclusively predict 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 0.00%.

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.

Sanderson Farms, Inc. (SAFM - Free Report) has an Earnings ESP of +122.02% and it presently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Grocery Outlet Holding Corp. (GO - Free Report) currently has an Earnings ESP of +5.66% and a Zacks Rank #2.

Nomad Foods Limited (NOMD - Free Report) has an Earnings ESP of +2.22% and a Zacks Rank #3 at present.

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