US: A-B wins analyst's praise ahead of Q2
Anheuser-Busch is poised to deliver some impressive quarterly figures next week, according to an investment analyst.
Bear Stearns said yesterday (17 July) that it felt the US brewing giant, due to release second-quarter figures next Wednesday, "should yield (its) best quarter since A-B began its slide in the beginning of 2005". While maintaining a rating of 'Peer Perform', the analyst upped its EPS estimate for the brewer from US$0.72 to US$0.78.
Citing figures from the Beer Institute, Bear Stearns noted that overall domestic shipments in the US were up by 1.3% in the first two months of the quarter. "We have seen only limited promotional pricing activity," the analyst added. "A-B is also lapping the one-time increase in selling costs for product and package initiatives in the first half of 2005."
However, Bear Stearns warned that A-B still had "major structural issues" to resolve.
"Although A-B is certainly making progress, we do not believe the King has regained its earnings mojo just yet. We maintain that, even with its recent acquisitions, A-B's major structural issues in its domestic portfolio and global geographic footprint have yet to be resolved.
"The Budweiser family is poised to tip into permanent volume declines and the accelerated growth of the company's sub-premium brands is a major weight on overall pricing growth."
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