2012 was "a year of two halves"

2012 was "a year of two halves"

Carlsberg holds more potential for investors than its rivals brewers this year as its Russian performance continues to improve, according to an analyst.

The Danish brewer's stock price has suffered from its exposure in its key market of Russia, Bernstein analyst, Trevor Stirling, said in a note yesterday (8 January). But though 2013 is “unlikely to be a bumper year for Carlsberg”, a stabilised Russian market and the brewer's reversal of a two-year market share lose there mean its stock will outperform, Stirling said.

Its rival, Heineken, should also see a jump in share price as Mexico drives fresh growth and its recent Asia Pacific Breweries deal adds to earning, he added.

Carlsberg and Heineken will both be boosted this year due to lower barley and aluminium costs and better cost savings, Stirling suggested. “We expect that this improved earnings outlook will also lead to a further modest re-rating, resulting in the end of the double discount that we believe afflicts both stocks,” the note said.

Meanwhile, Anheuser-Busch InBev's share growth is expected to be held back by its exposure to the US, Stirling said. But he added: "US beer volumes are improving as unemployment in key demographics is slowly but steadily declining and the rate of consumer deleverage is slowing."

For SABMiller, currency fluctuations in its core emerging markets will damage profits, Stirling predicted.

Meanwhile, the analyst branded 2012 “a year of two halves” for Europe's beverage shares, with H1 out-performance giving way to a 2% under-performance in H2.

“We expect this (H1) pattern to continue into 2013,” Stirling said, adding that investors are likely to take funds from beverages to invest in higher-risk shares.

The note added: “We are likely looking at several more months of subdued broadly-neutral relative performance.”

Expert analysis

Global Beer Tax Tables, 2012

Global Beer Tax Tables, 2012

This report covers 58 markets and comprises a series of tables covering taxation base, historical excise rates, legal controls and a calculation of the total taxation burden on beer....read more