UK: Citigroup reviews brewing sector share coverage

By just-drinks.com editorial team | 23 July 2007

InBev and SABMiller have had their share coverage raised.

Citigroup said today (23 July) that it has upped its rating on the two brewer to 'buy' from 'hold'. At the same time, the broker increased the target price for InBev to EUR70 from EUR51, and SABMiller's to 1,500 pence from 1,215 pence.

At the same time, Citigroup upped Heineken's target price to EUR49 from EUR38 as part of a reshuffle of the beer sector.

Consolidation within the brewing industry will be driven by emerging markets growth and the potential for cost savings, Citigroup forecast. The broker also said that it expects "an alliance between Anheuser-Busch and InBev' within the next two years to be a 70% possibility.

While InBev is well-placed to grow in emerging markets, Citigroup said it anticipates positive news flow from SABMiller's South Africa operations going forward.

Sectors: Beer & cider

Companies: InBev, SABMiller, Heineken, Anheuser-Busch