Anheuser-Busch Stock Surges 6% This Week on Earnings Beat and Analyst Upgrades

Core Viewpoint - Anheuser-Busch InBev's stock surged 6% this week following an earnings beat and multiple analyst upgrades, reflecting strong performance and positive market sentiment towards the company [1]. Group 1: Stock Performance - Anheuser-Busch InBev (BUD) gained 6% this week, outperforming the S&P 500 and consumer staples peers, with a year-to-date increase of 25.5% compared to 15.2% for the sector [1]. - The stock is currently trading at $80.39, nearing its 52-week high of $81.56, and has surged 54% over the past year, significantly outperforming the sector's 13% return [1]. Group 2: Analyst Upgrades - Evercore ISI raised its price target for BUD from $75 to $100, a 33% increase, indicating a potential 24% upside from current levels [1]. - Wells Fargo also raised its price targets for BUD, first to $85 and then to $88, while other firms like Goldman Sachs, Barclays, and JPMorgan reaffirmed Buy ratings with targets between $77 and $94 [1]. - The average analyst target for BUD is now $79.10, with 9 Buy or Strong Buy ratings compared to 3 Holds and no Sells, signaling a fundamental shift in market perception [1]. Group 3: Earnings Performance - Anheuser-Busch InBev reported Q4 EPS of $0.95, beating the consensus estimate of $0.89 by 7%, with revenue of $15.55 billion and organic revenue growth of 2.5% [1]. - This marks the fourth consecutive quarter that BUD has exceeded earnings estimates, generating $11.3 billion in free cash flow last year and expanding margins by 101 basis points [1]. - Management has guided for 4% to 8% EBITDA growth for 2026, indicating confidence despite volume challenges in markets like China and Brazil [1]. Group 4: Valuation Concerns - BUD is trading at 27 times trailing earnings, which is considered elevated for a beverage company facing volume pressures [1]. - Short interest in BUD is low at 0.9% of the float, but it has increased by 7% recently, indicating mixed sentiment among institutional investors [1]. - The bull case for BUD relies on the success of its premium brand strategy and margin expansion, while the bear case highlights potential volume declines and geographic weaknesses that could impact growth [1].