AB InBev is the largest brewer in the world. The company produces, markets, distributes, and sells a portfolio of over 500 beer brands. Its global flagship brands include Budweiser, Stella Artois, and Beck's. In addition, the company brews and distributes the global Corona brand through its operating Mexican subsidiary, Grupo Modelo. Following its acquisition of SABMiller a few years ago, the company also has a major presence in Africa. In South Africa, it owns the Castle and Black Label brands, among others.
ANH is geographically diversified with exposure to both developed and developing markets. Revenue and volumes have recovered to being ahead of pre-pandemic levels, despite a marketing misstep resulting in pressure on Budweiser volumes more recently.
Technically, the share price is forming a base (see the shaded rectangle on the main chart). A base suggests that selling pressure is fading. The price recently crossed above key support (see the black trendline). This suggests that buyers are in control.
The share is close to its 200-day simple moving average of around R1 065.35. A further improvement in sentiment will attract more buying pressure, leading to further support for the bullish trend.
Fading downside momentum, according to the MACD indicator, supports our bullish stance. This is further emphasised by the sidewards movement of the OBV indicator, which suggests that money continues to flow into the share.
Share Information
| Share code | ANH |
|---|---|
| Industry | Food, Beverage & Tobacco |
| Market Capital (ZAR) | 2140.57 billion |
| One year total return | 26.91% |
| Return year-to-date | 5.11% |
| Current price (ZAR) | 1 062.39 |
| 52 Week high (ZAR) | 1 232.01 |
| 52 Week low (ZAR) | 804.72 |
| Financial year end | December |
| Closing paragraph | The share price has performed well over the last 12 months and has seen modest growth YTD. Several technical indicators are pointing to further upside potential. |
Consensus Expectations (Bloomberg)
| FY23E | FY24E | FY25E | FY26e | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 3.05 | 3.56 | 4.06 | 4.68 |
| Growth (%) | 16.84 | 14.19 | 15.21 | |
| Dividend Per Share (USD) | 1.00 | 1.36 | 1.74 | 2.31 |
| Growth (%) | 35.33 | 28.32 | 32.53 | |
| Forward PE (times) | 18.65 | 15.96 | 13.98 | 12.14 |
| Forward Dividend Yield (%) | 1.76 | 2.39 | 3.06 | 4.06 |
| Closing paragraph | Robust earnings growth is expected over the short to medium term. Dividend growth is anticipated to outstrip earnings growth. | |||
Buy/Sell Rationale
Technical Analysis:
Fundamental view:
| Share Name and position |
INL - BUY (Continue to hold) |
QLT - BUY (Continue to hold) |
APN - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 105.00 | 18.95 | 182.66 |
| Current | 108.67 | 19.40 | 186.75 |
| Movement | 3.5% | 2.4% | 2.2% |
| Summary text |
The price is noteworthy based on the RRG analysis, particularly due to its ability to stay above the 200-day simple moving average. Upside momentum supports the trade idea.
Our profit target is R121, with a trailing stop-loss at R102. Exit the trade around 30 October 2023. |
The price seems to be forming a base pattern as it tests its 200-day moving average. Fading downside price momentum supports the trade idea.
Our profit target is R22.50, with a trailing stop-loss at R17.85. Exit the trade around 30 October 2023. |
A developing symmetrical triangle pattern remains of interest. Trading continues above the 200-day simple moving average with upside price momentum supportive of the trade idea.
Our profit target is R222, with a trailing stop-loss of R163. Exit the trade around 27 December 2024. |
| Share Name and position |
DCP - BUY (Continue to hold) |
LHC - BUY (Continue to hold) |
DSY - BUY (Continue to hold) |
|---|---|---|---|
| Entry | 24.12 | 20.53 | 152.50 |
| Current | 24.33 | 20.30 | 148.01 |
| Movement | 0.9% | 0.1% | -2.9% |
| Summary text |
The share continues to display early signs of a bullish divergence. The share remains below its 200-day simple moving average, indicating a counter-trend trade possibility. The price action also seems to be building a base.
Our profit target is R29, with a trailing stop-loss at R22.50. We suggest extending the exit time from 4 September 2023 to 29 December 2023. |
The price appears to be in the upper range of a declining channel pattern, and this remains of interest. The share remains above its 200-day simple moving average. Upside price momentum supports the trade idea.
Our profit target is R27, with a trailing stop-loss at R18. Exit the trade around 6 November 2023. |
A developing symmetrical triangle pattern remains of interest. The share remains just above its 200-day simple moving average. Upside price momentum halted, which is a concern.
Take profit target set at R182. Trailing stop-loss at R135. Time to exit: 27 May 2024. |
