It hasn't been a great afternoon session for Anheuser-Busch InBev investors, who have watched their shares sink by -1.9% to a price of $62.31. Some of you might be wondering if it's time to buy the dip. If you are considering this, make sure to check the company's fundamentals first to determine if the shares are fairly valued at today's prices.
Anheuser-Busch InBev's Valuation Is in Line With Its Sector Averages:
Anheuser-Busch InBev SA/NV produces, distributes, exports, markets, and sells beer and beverages. The company belongs to the Consumer Staples sector, which has an average price to earnings (P/E) ratio of 21.21 and an average price to book (P/B) ratio of 4.12. In contrast, Anheuser-Busch InBev has a trailing 12 month P/E ratio of 26.7 and a P/B ratio of 1.51.
When we divideAnheuser-Busch InBev's P/E ratio by its expected five-year EPS growth rate, we obtain a PEG ratio of 0.9, which indicates that the market is undervaluing the company's projected growth (a PEG ratio of 1 indicates a fairly valued company). Your analysis of the stock shouldn't end here. Rather, a good PEG ratio should alert you that it may be worthwhile to take a closer look at the stock.
A Positive EPS Growth Rate but Not Enough Current Assets to Cover Current Liabilities:
| 2018 | 2019 | 2020 | 2021 | 2022 | 2023 | |
|---|---|---|---|---|---|---|
| Revenue (M) | $53,041 | $52,329 | $46,881 | $54,304 | $57,786 | $59,380 |
| Gross Margins | 62% | 61% | 57% | 56% | 54% | 54% |
| Net Margins | 11% | 20% | 5% | 11% | 13% | 12% |
| Net Income (M) | $5,688 | $10,414 | $2,202 | $6,114 | $7,597 | $6,891 |
| Net Interest Expense (M) | $4,141 | $4,168 | -$4,004 | $3,674 | $3,588 | $3,696 |
| Earnings Per Share | $2.17 | $4.53 | $0.69 | $2.28 | $2.91 | $2.6 |
| EPS Growth | n/a | 108.76% | -84.77% | 230.43% | 27.63% | -10.65% |
| Avg. Price | $88.08 | $80.77 | $55.68 | $62.99 | $57.64 | $62.33 |
| P/E Ratio | 39.86 | 17.48 | 79.54 | 27.03 | 19.41 | 23.52 |
| Free Cash Flow (M) | $15,064 | $14,036 | $10,891 | $14,799 | $13,298 | $13,265 |
| Current Ratio | 0.52 | 0.83 | 0.82 | 0.7 | 0.67 | 0.63 |
