As shares of the Anheuser-Busch’s (NYSE: BUD) just above their multi-year lows, is it the right time to consider buying the company’s stock? There are many reasons why the shares of the brewing giant have tumbled. In addition to that, the coronavirus pandemic impacts the sales of the company, which declines the aggressive cost-cutting will negatively impact the stock of the company. The Belgium based beer producer has seen the company’s stock has dropped since the bars are closed, and people take their consumption of alcohol in their home itself. Hence, the pandemic fear appears to have taken the stock into overvalued territory. Even though it might make the shares looks more attractive, investors have to take some sound decision in their investing.
Sales suffered for years
The issue does not only start with the pandemic alone. The NYSE: BUD stock has declined by about 48 percent. Since the year 2016, the company shares have been fallen from a price of 125 dollars per share to above 42.50 dollars per share these days. You might have some queries like what is driving all these long-term declines, Right? The 3G involvement, along with the company and the disastrous results, will be the major issue. The cost-cutting will ultimately hurt this company. In addition to that, the craft brewing rises negatively impacted the legacy brands of the company like Budweiser.
Pandemic is just the short challenge
At first, it seems to be the consumer goods companies should not badly hurt by this pandemic. But about a third, the sales of the company come from off-premises consumption. This term will be defined to be the beer purchased at bars, restaurants, stadiums, and more. For this reason, the businesses shuttered due to this pandemic. Yes, you have to consider twice before investing in such stocks. But as the states are tending to reopen the markets, the demand for the products will likely have bottomed.
You should know about the fact that; the pandemic will surely affect the near-term profitability of the brewing giant NYSE: BUD. The shares like nyse hon might move nearly 70 percent higher over the next year as the profit of the company will be rebound in 2021. There would definitely be a 70 percent return for the investors who are buying their company stock today. Consider all the minimal downside as well as the high potential, the stock of the Anheuser-Busch company is a loud buy in price of today’s market.
Disclaimer: The analysis information is for reference only and does not constitute an investment recommendation.