BUD stock price analysis after the AB InBev earnings

AB Inbev (NYSE: BUD) stock price has retreated in the past few days as the recent momentum faded. The shares were trading at $64, which was about 4.20% below the highest point this year. The company published strong financial results on Thursday.

AB Inbev earnings review

AB Inbev financial results showed why the ongoing boycotts in the United States will likely not impact the company. As I wrote here, the company has been facing a boycott after running an advert campaign with Dylan Mulvaney, a transgender teen.

The results showed that the company’s revenue jumped from $13.2 billion in Q1/22 to over $14.1 billion in Q1’21. Is gross profit jumped from $7.2 billion to over $7.6 billion while the profits attributed to equity holders rose to $1.3 billion.

While beer volume in the country dropped in the first quarter, the decline was offset by other regions like in Asia Pacific and Middle America. Therefore, there is a possibility that the company’s global scale will help it to weather the storm in the US. Michel Doukeris, the CEO said:

“We continue to invest for the long-term and these results reinforce our confidence in the resilience of the beer category, the effectiveness of our strategy and the strength of our platform to deliver consistent profitable growth.”

The other fact is that boycotts rarely work. Historically, we have seen calls for boycotts of popular companies like Twitter, Facebook, Apple, and Unilever only for their businesses to thrive. In the case of AB Inbev, people who are used to drinking Bud Light will still continue drinking it. 

The other reason is that AB Inbev is much more than Bud Light. In the United States, the company sells other beer brands like Michelob Ultra, Corona, and Presidente among others. Therefore, there is a likelihood that its boycotters will find themselves drinking AB Inbev’s beers without even knowing it.

What next for BUD stock price?

As I wrote here, I believe that AB Inbev stock price will continue rising, thanks to the recent outrage and boycotts. With expectations being low, the company will likely benefit if it manages to beat expectations. 

Therefore, on the daily chart, we see that the BUD stock price has found a strong resistance at $66.55, the highest point this year. This price was also a few points below the 61.8% retracement point. It is also being supported by the 50-day and 25-day moving averages. 

Therefore, I suspect that there will be some short-term volatility ahead of a major comeback, which could see the shares jump to $80.