Shares of Anheuser-Busch InBev SA/NV BUD, alias AB InBev, have been doing well for a while, thanks to its robust strategic measures. Over the past three months, BUD shares have gained 25%, comfortably outperforming the broader Consumer Staples sector and the Zacks Beverages - Alcohol industry’s growth of 15.3% and 5.5%, respectively. The stock also surpassed the S&P 500 index’s drop of 10.2% in the same period.

BUD’s Growth Efforts Bode Well

The company’s relentless execution, investment in brands and accelerated digital transformation have been driving its top-line results for a while. Solid consumer demand for AB InBev’s brand portfolio has been aiding. It registered organic revenue growth of 3.4% in the most recent quarter, led by ongoing premiumization and higher revenue per hectoliter (hl), with revenue growth in 75% of its markets.

The company’s premiumization strategy is a key growth driver. It has been investing in developing a diverse portfolio of global, international and crafts and specialty premium brands in its markets. Within the above-core brands, Corona led the performance with a low-teens revenue growth outside of Mexico, including double-digit volume growth in more than 30 markets.

BUD has been focused on expanding its Beyond Beer portfolio as well. Notably, the Beyond Beer portfolio contributed 2% to total revenues in 2024, recording low single-digit growth, driven by double-digit growth in key brands such as Cutwater, Nütrl and Brutal Fruit.

AB InBev has been keen on making investments in its portfolio alongside growing its digital platform, including BEES and Zé Delivery. Its B2B digital platforms accounted for about 75% of its revenues in 2024. BUD’s omnichannel, direct-to-consumer ecosystem of digital and physical products generated $1.4 billion in revenues in 2024.

BUD Price Performance

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AB InBev Shows Higher Estimate Revisions

Analysts seem quite optimistic about BUD. The Zacks Consensus Estimate for AB InBev’s 2025 earnings per share (EPS) has risen 2.2% to $3.73 in the past 30 days. The consensus estimate for 2026 EPS has increased 1.5% to $4.18 in the aforementioned period.

For 2025, the Zacks Consensus Estimate for BUD’s sales and EPS implies 1.6% and 5.7% growth, respectively, year over year. For 2026, the consensus mark for sales and EPS indicates a 3.7% and 12% year-over-year increase, respectively.

Bumps in BUD’s Growth Path

AB InBev continues to witness elevated costs from commodity cost inflation and higher supply-chain costs, and investments to support long-term growth. In addition, a tough macroeconomic environment is a concern.

For 2025, AB InBev expects net pension interest expenses and accretion expenses to be in the band of $190-$220 million per quarter, based on currency and interest rate fluctuations.

BUD’s Valuation

Going by the price/earnings ratio, AB InBev stock is currently trading at 16.35 on a forward 12-month basis, slightly higher than 15.53 for the industry. The stock is trading lower than its median of 16.62.

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Conclusion

Nevertheless, AB InBev’s pricing actions, premiumization and other revenue-management initiatives have been yielding results. It exhibited a sturdy performance in fourth-quarter 2024. The company’s revenues and EPS beat the Zacks Consensus Estimate and improved year over year. Top and bottom-line growth reflected positive business momentum, owing to the strength of its diversified footprint and consumer demand for its megabrands.

BUD’s strong execution, brand momentum and operational excellence position it for sustained growth. For 2025, the company expects year-over-year EBITDA growth in the band of 4-8%, in line with its medium-term outlook. Upward earnings estimate revisions further bode well for this Zacks Rank #3 (Hold) stock.

Stocks to Consider in Consumer Staples Space

United Natural Foods UNFI, which is a distributor of natural, organic and specialty food in the United States, currently carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

UNFI has a trailing four-quarter earnings surprise of 408.7%, on average. 

The Zacks Consensus Estimate for UNFI’s current financial-year sales and EPS indicates growth of 1.9% and 485.7%, respectively, from the year-ago numbers.

Utz Brands UTZ manufactures salty snacks under popular brands and has a Zacks Rank of 2. UTZ has a trailing four-quarter average earnings surprise of 8.8%.

The Zacks Consensus Estimate for UTZ’s current financial-year sales and EPS implies growth of 1.2% and 10.4%, respectively, from the year-ago numbers.

Nomad Foods NOMD, which manufactures frozen foods, currently carries a Zacks Rank of 2. NOMD has a trailing four-quarter earnings surprise of 5%, on average.

The Zacks Consensus Estimate for Nomad Foods’ current financial-year EPS indicates growth of 3.1% from the year-ago number.

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Anheuser-Busch InBev SA/NV (BUD) : Free Stock Analysis Report

United Natural Foods, Inc. (UNFI) : Free Stock Analysis Report

Nomad Foods Limited (NOMD) : Free Stock Analysis Report

Utz Brands, Inc. (UTZ) : Free Stock Analysis Report

This article originally published on Zacks Investment Research (zacks.com).

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