AB InBev to Post Q3 Earnings: Essential Insights Ahead of the Report

Core Viewpoint - AB InBev is expected to report year-over-year revenue and earnings growth for the third quarter of 2024, with a consensus estimate of $15.6 billion in revenues and earnings of 92 cents per share, reflecting a 0.2$15.6 billion, indicating a 0.2% growth from the prior year's quarter [2]. - The consensus estimate for earnings is 92 cents per share, suggesting a 7% increase from the previous year's reported figure [2]. - In the last reported quarter, AB InBev's earnings per share exceeded the Zacks Consensus Estimate by 7.1%, with an average positive earnings surprise of 5.9% over the last four quarters [3]. Earnings Prediction Model - The current Zacks model does not predict a definitive earnings beat for AB InBev, as it holds a Zacks Rank of 3 (Hold) and an Earnings ESP of -0.27% [4]. Growth Drivers - AB InBev is expected to benefit from premiumization efforts and positive industry trends, focusing on premium beer offerings that align with consumer preferences [5]. - The company has been building a diverse portfolio of global, international, craft, and specialty premium brands, which is anticipated to contribute to revenue growth [5]. - Demand for AB InBev's brand portfolio, along with effective pricing strategies and digital transformation, has supported revenue growth in recent quarters [6][8]. Market Trends - Management has predicted that positive business trends will continue throughout 2024, estimating a 1.5% revenue increase for Q3 2024, with a 2.4% year-over-year growth in revenue per hectoliter [7]. - The resilience in the global beer category is expected to positively impact AB InBev's performance in the third quarter [6]. Cost Pressures - The anticipated third-quarter results may reflect the impacts of elevated commodity cost inflation and increased supply-chain expenses, leading to higher costs of goods sold [9]. - Rising SG&A expenses due to increased business investments and higher operating costs are expected to pressure AB InBev's EBITDA margin [9]. Valuation and Stock Performance - AB InBev is trading at a forward 12-month price-to-earnings ratio of 17.35X, which is below its five-year high of 25.58X and the industry average of 17.61X, indicating an attractive investment opportunity [10]. - Over the past three months, AB InBev shares have risen by 19.1%, contrasting with a 0.9% decline in the industry [11].