Anheuser-Busch
What analysts say:
- Buy, sell, or waffle? Eighteen analysts follow Budweiser. Five want to buy it, 12 more are content to hold, and one would sell the shares.
- Revenue. On average, analysts expect quarterly sales to increase 6.5% to $3.65 billion.
- Earnings. Profits are predicted to rise 28% to $0.32 per share.
What management says:
A few months back, comparing the bierbrauer unfavorably to liquor purveyors Diageo
What management does:
Sales climbed 8% last quarter, and profits rose 16%. A-B has managed to keep its bottom-line net margin more or less intact, so profits have been able to track sales growth. Ryan credits the company's industry-leading market share in the U.S. for giving it the pricing power to maintain those margins. The flip side of that argument, as Fool Rich Duprey pointed out earlier this month, is that a merger between SABMiller and Molson Coors
6/06 |
9/06 |
12/06 |
3/06 |
6/07 |
9/07 |
|
---|---|---|---|---|---|---|
Gross |
35.5% |
35.5% |
35.3% |
35.4% |
35.2% |
35.2% |
Operating |
17.2% |
17.3% |
17.3% |
17.2% |
17.0% |
17.1% |
Net |
11.6% |
11.3% |
12.5% |
12.5% |
12.6% |
12.7% |
One Fool says:
The stock currently trades for nearly 17 times trailing earnings and 18 times trailing free cash flow. With analysts expecting less than 9% annual profits growth over the next five years, I consider A-B overpriced by either measure. Sure, maybe the King will surprise us and turn in double-digit profits growth. But with its U.S. archrival now getting bigger, I wouldn't bet on it.
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