Bud Light is now selling for less than water in some US warehouses, but is BUD stock too cheap to pass up? 1 reason to pick it up now

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Checking out:‘Headwinds likely to ease’Read more:Bud Light is now selling for less than water in some US warehouses, but is BUD stock too cheap to pass up? 1 reason to pick it up now

Bud Light has been fighting an uphill battle since teaming up with transgender social media influencer Dylan Mulvaney in April.

While Mulvaney has 10.6 million followers on TikTok, the collaboration caused a backlash on social media and led to a boycott by some beer drinkers.

The New York Times recently reported that Glenn Miller’s Beer & Soda Warehouse in Lemoyne, Pennsylvania, sold a 30-pack of Miller Lite for $24.99. In contrast, a 30-pack Bud Light was only $8.99 after a discount.

“Right now it’s cheaper than some of the cases of water we sell in the back,” said Andy Wagner, warehouse manager. “It just doesn’t move like it used to.”

Wagner pointed out that since mid-April, sales of Bud Light at his store are down 45% from a year ago. The decline can be attributed to changing consumer preferences.

“It’s not that they stopped drinking beer,” he said. “They just stopped buying Bud Light.”

Shares of Anheuser-Busch InBev (NYSE:BUD), the multinational brewery behind Bud Light, also took a hit. Since April 1, when Mulvaney first promoted the beer on social media, BUD stock has fallen about 15% on the New York Stock Exchange.

While that fall in stock price has led to the loss of billions of dollars in market capitalization, the situation may present opportunities for recalcitrant investors.

Checking out:

‘Headwinds likely to ease’

It’s no secret that Bud Light has lost market share.

According to consulting firm Bump Williams, based on data from NielsenIQ, Bud Light is no longer America’s best-selling beer. The top spot now belongs to Modelo Especial, brewed by Constellation Brands (NYSE:STZ).

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Bud Light’s declining market share makes for a worrying outlook for AB InBev (ABI), but Deutsche Bank analyst Mitch Collett sees potential in the company.

“We believe recent underperformance represents a permanent reduction in ABI’s US business. Our own research data suggests that these headwinds are likely to abate, even if we don’t expect the US business to ever fully recover from current challenges,” the analyst wrote. in a recent research note.

Collett upgraded his rating for AB InBev from hold to buy and raised the price target for the company’s European-listed shares from €59 ($64.13) to €60 ($65.21).

With the stock currently trading at €52.29 ($56.83), the analyst’s new price target implies a potential upside of 14.7%.

Collett’s point is that while Bud Light’s situation is unfavorable, there is room for improvement going forward.

“Taken together, our survey data shows that Bud Light as a brand is facing major challenges, especially with older consumers,” he wrote. “However, we believe the forward-looking datasets imply that the challenges will at least partially fade.”

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This article ‘They just stopped buying’: Bud Light is now selling for less than water in some US warehouses, but is BUD stock too cheap to pass up? 1 reason to pick it up now originally appeared on Benzinga. com