HSBC upgraded Anheuser-Busch InBev (BUD) to a Buy rating after having the beer stock slotted at Hold.
Analyst Carlos Laboy pointed to attractive valuation on BUD following its recent share price weakness.
"Having lost more than 20% of its value in the past year, we upgrade ABI on valuation, and because revenues and margin pressure should ease into year-end and next year," he noted.
Operationally, pricing actions and premiumization are noted to be helping the beer giant to mitigate inflation. Laboy pointed out that premium brands continue to drive growth, with Brazil a big standout with demand for Corona is outstripping supply by 3X to 4X.
For the second half of the year, marketing and innovation are expected to lead to more growth for the premium business and the World Cup in November is expected to also help drive top-line growth momentum.
Shares of Anheuser-Busch InBev (BUD) gained 2.44% in premarket trading to $49.03.
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