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Factors Likely to Decide AB InBev's (BUD) Fate in Q3 Earnings

Zacks Equity Research

Anheuser-Busch InBev SA/NV BUD, also known as AB InBev, is slated to release third-quarter 2019 results on Oct 25. In the last reported quarter, it delivered a positive earnings surprise of 10.6%.

However, the company recorded average negative surprise of 6.1% in the trailing four quarters. The Zacks Consensus Estimate for its earnings in the third quarter is pegged at $1.36, suggesting growth of 65.9% from the year-ago quarter’s reported figure. Moreover, estimates witnessed an uptrend in the last 30 days.

The Zacks Consensus Estimate for total revenues of $13.98 billion indicates growth of 5.3% from the year-ago quarter’s reported number.

Anheuser-Busch InBev SA/NV Price and EPS Surprise


Anheuser-Busch InBev SA/NV Price and EPS Surprise

Anheuser-Busch InBev SA/NV price-eps-surprise | Anheuser-Busch InBev SA/NV Quote

Factors at Play

Strong sales trend and consistent strength in global brands — Budweiser, Corona and Stella Artois — are likely to have contributed to AB InBev’s top-line performance. Revenues in the third quarter must have gained from improving trends in key markets and continued growth of premium brands. The company’s global premiumization and revenue-management initiatives are also likely to have aided revenue per hl growth in the quarter under review.

However, softness in beer demand, particularly in the United States, is likely to have impacted total and own-beer volumes in the region. Major change in consumer preferences toward premiumization along with health and wellness awareness, and demographic changes in the population is causing a mix shift within the beer segment. Further, adverse currency translations and commodity cost inflation are concerning.

What the Zacks Model Unveils

Our proven model doesn’t conclusively predict earnings beat for AB InBev this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

AB InBev has a Zacks Rank #4 (Sell) and Earnings ESP of 0.00%.

Stocks Poised to Beat Earnings Estimates

Here are some companies that you may want to consider as our model shows that these have the right combination of elements to deliver an earnings beat.

The Estee Lauder Companies Inc EL has an Earnings ESP of +0.50% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.

Molson Coors Brewing Company TAP has an Earnings ESP of +4.56% and a Zacks Rank #3.

Kimberly-Clark Corporation KMB has an Earnings ESP of +0.88% and a Zacks Rank of 3.

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