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Anheuser-Busch InBev stock (BUD) has outperformed in 2019, but Barclays argues there are better bets in the beer market, given worries over debt and peer-lagging growth.

The Back Story. AB InBev investors didn’t have much to cheer in 2018. Although it wasn’t the only brewer underperforming, the company did face worries about its debt and a big dividend cut. However, like so many of last year’s laggards, AB InBev has reversed course in 2019, thanks to its commitment to right size its balance sheet, analyst optimism, post-earnings gains, and new product innovation, from cocktails to cannabis. While skeptics remain, the shares have climbed 27.7% year to date, although that still leaves AB InBev down 23% for the latest 12 months.

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What’s New. Barclays’ Laurence Whyatt initiated coverage on AB InBev with an Equal Weight rating on Tuesday, and a €79 price target on its European-traded shares. He estimates that the company will grow its revenue by 3% to 4% over the next three years, with about 30 to 40 basis points of margin expansion. “Whilst credible in the market, this is below the majority of beverages stocks, and therefore we believe warrants a discount,” Whyatt wrote. “In addition, the company has one of the weakest balance sheets in the sector.”

Looking Ahead. Whyatt’s rating was part of a larger initiation of coverage on beverage makers. Plenty of investors have noted consumers’ waning appetite for beer, and Whyatt argues in general that he prefers the spirits makers, which he believes can raise prices farther than brewers.

That said, he writes that beer companies in regions with fewer competitors, like emerging markets, should enjoy more pricing power. While the U.S. drinkers have been trading big brands for imports and craft drafts, other countries, from Mexico to Vietnam, are friendlier to the old behemoths. That leads him to initiate coverage on Heineken (HEINY) and Carlsberg (CABGY) with Overweight ratings, especially as the latter enjoys a stronghold in several areas of fast-growing China.

AB InBev is up 0.2% to $83.86 in recent trading.

Write to Teresa Rivas at teresa.rivas@barrons.com