AB InBev (NYSE:BUD) Q2 2024 Earnings Preview

• AB InBev's revenues are projected to be around $15.2 billion, a slight increase of 0.6% from the previous year, with earnings anticipated to hit 84 cents per share, marking a significant rise of 16.7%.
• The company's strategic focus on premium beer variants and the expansion of its Beyond Beer portfolio are expected to drive volume gains despite challenges such as increased costs due to commodity price inflation and higher supply-chain expenses.
• Financial metrics such as the price-to-earnings (P/E) ratio of approximately 19.06, and an earnings yield of about 5.25% reflect investor confidence and the company's solid financial standing.

AB InBev (NYSE:BUD), a leading global brewer, is gearing up to announce its second-quarter earnings for 2024 on August 1. The company, known for its extensive portfolio of beer and other beverages, is expected to show growth in both revenue and earnings compared to the same period last year. According to Zacks Consensus Estimate, AB InBev's revenues are projected to be around $15.2 billion, a slight increase of 0.6% from the previous year, with earnings anticipated to hit 84 cents per share, marking a significant rise of 16.7%.

The anticipated growth in AB InBev's performance can be attributed to several factors. Strong consumer demand for its diverse brand portfolio, coupled with effective pricing strategies and ongoing premiumization efforts, are expected to be key drivers. Additionally, the company's investments in brand development and a push towards digital transformation are likely to enhance its market share in crucial markets. The resilience of the global beer category further supports the optimistic outlook for BUD's second-quarter results.

Financial metrics such as the price-to-earnings (P/E) ratio, which stands at approximately 19.06, highlight investor willingness to pay for earnings, reflecting confidence in the company's profitability. The price-to-sales (P/S) ratio of about 1.62 and the enterprise value to sales (EV/Sales) ratio of approximately 1.76 provide insights into the company's valuation in relation to its sales. Moreover, the enterprise value to operating cash flow (EV/OCF) ratio of around 9.97 indicates the company's valuation compared to its operating cash flow, suggesting a solid financial standing. An earnings yield of about 5.25% offers a glimpse into the potential return on investment for shareholders.

Despite facing challenges such as increased costs due to commodity price inflation and higher supply-chain expenses, AB InBev's strategic focus on premium beer variants and the expansion of its Beyond Beer portfolio are expected to drive volume gains. These initiatives, along with efforts in digital platform expansion and portfolio diversification, are poised to positively impact the company's top and bottom lines in the reported quarter. However, it's important to note that Zacks' model does not conclusively predict an earnings beat for AB InBev this time, given its Zacks Rank #4 (Sell) and an Earnings ESP of +0.32%.