BUD Stock Reverses on Lower Bud Light Sales, Is the Bottom In?

Anheuser-Busch InBev NYSE: BUD is down about 4.25% a few days after it reported its fourth quarter and full-year 2023 earnings report on February 29, 2024. The downward move may be nothing more than a company delivering a so-so report at a time when investors were in a selling mood.  

The company's revenue missed topline revenue numbers by 7.4%. However, the company reported that full-year global revenue reached a record high of $59.4 billion.  

The news gets even more mixed when you look at earnings per share (EPS), which came in at 82 cents. That was 16% lower year-over-year. Full-year earnings were also down approximately 4%.  

The Company Still Has a Bud Light Problem 

However, while revenue was up, volume was down for the fourth quarter and the full year. And on the company's earnings call, it's clear that Anheuser-Busch still has a Bud Light problem. On the call, the company's chief executive officer, Michel Doukeris, remarked, "Our revenues (in North America) declined by 9.5% this year with STW (sales to wholesalers) down by 12.7%, primarily due to the volume decline of Bud Light." 

Both Sides of the Boycott Have a Point 

If you're unaware of why Bud Light and boycott are appearing in the same article, a simple internet search will fill you in. No matter where you stand personally, this has been a headwind on BUD stock for several quarters.  

The company hopes that its new advertising and its relationship with the National Football League (NFL) will help turn that headwind into a catalyst. The earnings report suggests that it still has work to do for the Bud Light brand. 

However, this is where it's important to remember that Anheuser-Busch did report that record high global revenue. This is a reminder that the company has several brands. And consumers may not be aware that brands like Corona, Michelob Ultra, or Stella Artois are also part of the Anheuser-Busch family. 

Michelob Ultra is the official sponsor of the National Basketball Association, and the Corona Cero (i.e., zero) brand is an official worldwide sponsor of the Olympic Games.  

Should You Get Involved with BUD Stock? 

Anheuser-Busch InBev is one of the iconic consumer staples stocks. As the company's earnings report shows, the beer category, which makes up the bulk of the company's revenue, remains strong with or without Bud Light. 

On the other hand, the buy/sell ratio among institutional investors was over 2:1 in favor of selling. In fairness, that broke a streak of about eight quarters where buying outpaced selling.  

The BUD stock chart also looks less than frothy. With the post-earnings pullback, the stock is back where it was in April 2023, which is when the boycott started. The Anheuser-Busch analyst ratings on MarketBeat suggest that the stock could move up near 2021 highs in the next 12 to 18 months. And the company is expecting to turn around the earnings story in the next 12 months.  

However, the company will likely need an interest rate cut or two for that to happen. Without that, consumers may enjoy the product more than the stock.