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Know How AB InBev (BUD) is Positioned Ahead of Q2 Earnings

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Anheuser-Busch InBev SA/NV (BUD - Free Report) , also known as AB InBev, is slated to release second-quarter 2021 results on Jul 29. The leading alcohol beverage company is likely to register year-over-year top and bottom-line growth when it reports second-quarter 2021 results. The Zacks Consensus Estimate for AB InBev’s second-quarter earnings is pegged at $1.21 per share, suggesting 163% growth from 46 cents reported in the year-ago quarter. The consensus estimate has moved up 26% in the past 30 days.

For second-quarter revenues, the consensus mark is pegged at $13.58 billion, suggesting 31.9% growth from the prior-year reported figure.

In the last reported quarter, the company delivered an earnings surprise of 6.25%. Its earnings beat the Zacks Consensus Estimate by 12.1%, 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

AB InBev’s top line has been witnessing momentum, driven by a marked recovery in volume and revenue per hectoliter (hl). Strength in the off-premise channel and premium brands, and investment in B2B platforms, e-commerce channels and digital marketing in the past few months have been key growth drivers. The company has been benefiting from its unique commercial strategy, strong brand portfolio and operation excellence, which have led to market share growth across the majority of the key markets. The persistence of the aforementioned factors is expected to have aided the second-quarter performance.

Continued resilience in the global beer category is also expected to have aided the sales performance in the to-be-reported quarter.

AB InBev has been steadfastly growing its Beyond Beer portfolio, including products such as Ready to Drink Beverages like Canned Wine and Canned Cocktails, Hard Seltzers, Cider, and Flavored Malt Beverages. The Beyond Beer trend has been gaining popularity due to the rise in demand for low-alcoholic or non-alcoholic drinks. Incremental growth from the Beyond Beer portfolio has been contributing to the bottom-line improvement. Its Beyond Beer products have a 20% higher gross profit per hl, on average, than traditional beer.

The company has been building new capabilities for several years to better connect with customers and consumers by leveraging technology such as B2B sales and other e-commerce platforms. Consumers’ shift to in-home consumption occasions over the past year due to the pandemic has led to growth in the e-commerce channel.

Consequently, the company has been witnessing an acceleration in the B2B platforms, e-commerce and digital marketing trends, which has been aiding growth. Its second-quarter performance is expected to have gained from the continued investments in its e-commerce and digital marketing portfolio, including BEES and Ze Delivery.

However, the company has been witnessing cost headwinds, driven by higher cost of sales, SG&A expenses and other costs, which is likely to have impacted margins in the second quarter. Adverse currency translations and headwinds from commodity, channel and packaging mix are likely to have continued to hurt EBITDA margin in the second quarter.

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 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.

Darling Ingredients Inc. (DAR - Free Report) has an Earnings ESP of +10.09% and it presently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Medifast Inc. (MED - Free Report) currently has an Earnings ESP of +7.27% and a Zacks Rank #2.

Tyson Foods, Inc. (TSN - Free Report) has an Earnings ESP of +9.03% and a Zacks Rank #2 at present.