Consumers choosing spirits over beer and weakness in the U.S., China and Latin America spell rough times ahead for Anheuser-Busch InBev, UBS said.
A Covid-19 trend of drinkers flocking to spirits instead of beer is continuing to pressure brewers, making now a good time to sell shares of Anheuser-Busch InBev , according to UBS. The firm on Thursday downgraded shares of the beverage company to sell from neutral and slashed its price target to €53 from €57. That implies a more than 7% downside from where shares are currently trading.
Worldwide weakness in beer This is partly because consumers have shifted to spirits over beer, and even a potential recession hitting discretionary spending likely won't get them to switch back. "Our analysis suggests the beer category is unlikely to benefit from deceleration in premium and above spirits," said Oliver. "That said, AB InBev's offering in the value segment can help mitigate the negative impact of downtrading on volume, at the expense of product mix.
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