Bud Light Boycott Already Costs Anheuser-Busch $15.7 Billion

Another group is getting burned by Anheuser-Busch‘s (BUD) controversial Bud Light promotion: Its investors. But analysts insist the sting of the boycott on the company’s popular beer will dissipate.


The market value of Anheuser-Busch InBev, whose fourth bestselling brand is Bud Light, dropped $15.7 billion since April 1, based on a conversion to U.S. dollars by Investor’s Business Daily using data from S&P Global Market Intelligence. That’s the day Dylan Mulvaney, a TikTok influencer and transgender woman, pitched the Bud Light brand during the NCAA March Madness tournament.

Meanwhile, the other major publicly traded global beer brands have added $3.2 billion in market value during the same time.

The Bud Light backlash to the promotion was almost instantaneous. Conservative consumers called for a boycott of the beer. Bud Light sales are down more than 23% as of the week ended on May 6, said Jared Binges, beverage analyst at JPMorgan Chase in a note to clients Tuesday, citing data from NielsenIQ.

“We believe there is a subset of American consumers who will not drink a Bud Light for the foreseeable future,” Binges said. “We believe a 12% to 13% volume decline on an annualized basis would be a reasonable assumption.”

But analysts still aren’t worried.

Bud Light Brouhaha

Anheuser-Busch’s stock shows just how significant the boycott has been. With shares down 11.9% since April 1, the company’s investors are suffering while most other beer companies are trending higher.

The biggest winner from the Bud Light situation is Molson Coors Beverage (TAP). Shares are up more than 20% from April 1. That’s added more than $2.2 billion in market value to the stock.

Overseas brands are also benefiting. “Shares (Of Anheuser-Busch) have underperformed EU Beer peers by 15% since the start of April,” Binges said. “We believe this is due to U.S. uncertainty, as investor focus has shifted squarely to the potential impact from the Bud Light controversy.”

Analysts Not Worried

Damage to Anheuser-Busch’s business isn’t just swift, but significant. But analysts think the sell-off is overdone.

While Anheuser-Busch is based in Belgium, the U.S. is its largest source of revenue accounting for 25% of the total in 2022, Binges said. And Bud Light was the company’s fourth bestselling beer, accounting for 7% of volume sold in 2022. It only trails Budweiser at 11%, Corona at 8% and Brahma at 7%.

And the damage from the boycotts is lasting. JPMorgan thinks U.S. beer volumes for Anheuser-Busch will drop by 12% this year and knock down earnings before interest, taxes, depreciation and amortization by 23%. “We do not expect the lost sales to be recovered in fiscal year 2024,” Binges said.

But Binges still sees upside in the shares. His price target on the U.S. ADR shares is 76 a share. That would mark 29% upside to Tuesday’s close. And he’s not alone. Analysts’ average target price is 73 a share. And analysts still think the company will maintain 9.6% long-term growth. Anheuser-Busch’s adjusted earnings per share is seen shrinking less than 1% this year and growing again in 2024 by 18%.

How can analysts be so bullish on the stock when the business is softening? Simple. “This appears priced-in,” Binges said. Investors pushed the stock down so much they’re pricing in a 45% drop in earnings before interest and taxes. But Binges says the company’s cash flow is only likely to fall by 4%. The 26% drop in U.S. cash flow is offset by “upgrades in the rest of the business.”

“We believe risk-reward is favorable from here,” he said.

Big Beer Values Since Bud Light Boycott

Changes in market value since April 1

CompanySymbol (global exchange: symbol)Stock % ch. since April 1Market value ch. ($ millions)*
Anheuser-Busch InBev SA/NVENXTBR:ABI-11.9%-$15,687
Carlsberg A/SCPSE:CARL B4.4%-$200
Olvi OyjHLSE:OLVAS-5.2%-$34
Ottakringer Getränke AGWBAG:OTS-6.5%-$25
Alefarm Brewing A/SCPSE:ALEFRM-15.6%-$1
Browar Czarnków S.A.WSE:BRO6.6%$0
Brouwerij Handelsmaatschappij NVENXTBR:COBH0.6%$1
Harboes Bryggeri A/SCPSE:HARB B6.0%$3
Royal Unibrew A/SCPSE:RBREW4.8%$209
Heineken N.V.ENXTAM:HEIA1.7%$1,009
Molson Coors BeverageNYSE:TAP20.2%$2,201
Sources: S&P Global Market Intelligence, IBD, *converted to U.S. dollars

Follow Matt Krantz on Twitter @mattkrantz


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