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Ambev SA (ABEV)
NYSE:ABEV
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Ambev SA
(NYSE:ABEV)
83Outperform
Positive Factors
Capital Allocation
There is room for the company to accelerate cash distribution to shareholders, given its net cash position and sub-optimal capital structure.
Market Positioning
Higher beer prices could be positive for Ambev as the industry needs to increase prices, providing Ambev with an opportunity to be better positioned in the mainstream category and potentially gain market share.
Negative Factors
Dividend Expectations
Today's announcement could be disappointing to investors, but an additional payment in the short-term is not ruled out, as the company changes the distribution policy periodicity.
Ambev SA (ABEV) vs. S&P 500 (SPY)
Market Cap
$36.93B
Dividend Yield4.43%
Average Volume (3M)25.28M
Price to Earnings (P/E)13.6
Beta (1Y)0.37
Revenue Growth3.69%
EPS Growth-8.13%
CountryUS
Employees43,000
SectorConsumer Defensive
Sector Strength67
IndustryBeverages - Alcoholic
Share Statistics
EPS (TTM)0.17
Shares Outstanding15,757,657,000
10 Day Avg. Volume32,350,755
30 Day Avg. Volume25,275,840
Financial Highlights & Ratios
PEG RatioN/A
Price to Book (P/B)N/A
Price to Sales (P/S)2.69
Price to Cash Flow (P/CF)N/A
P/FCF Ratio0.00
Enterprise Value/Market CapN/A
Enterprise Value/RevenueN/A
Enterprise Value/Gross ProfitN/A
Enterprise Value/EbitdaN/A
Forecast
1Y Price Target
$3.00Price Target Upside29.87% Upside
Rating ConsensusModerate Buy
Number of Analyst Covering6
Ambev SA Business Overview & Revenue Model
Company DescriptionAmbev S.A., through its subsidiaries, produces, distributes, and sells beer, draft beer, carbonated soft drinks, other non-alcoholic beverages, malt, and food products in the Americas. The company operates through four segments: Brazil; Central America and the Caribbean; Latin America South; and Canada. It offers beer primarily under the Skol, Brahma, Antarctica, Brahva, Brahva Gold, Extra, Bud Light, Beck, Leffe and Hoegaarden, Bucanero, Cristal, Mayabe, Cacique, Presidente, Brahma Light, Presidente Light, Presidente Golden Light, Bohemia, The One, Corona, Modelo Especial, Stella Artois, and Budweiser, Quilmes Clásica, Paceña, Taquiña, Huari, Becker, Cusqueña, Michelob Ultra, Busch, Pilsen, Ouro Fino, Banks, Deputy, Patricia, Labatt Blue, Alexander Keith's, and Kokanee brands. The company also provides bottled water, isotonic beverages, energy drinks, coconut water, powdered and natural juices, and ready-to-drink teas under the Guaraná Antarctica, Gatorade, H2OH!, Lipton Iced Tea, Fusion, Do Bem, Pepsi, Canada Dry, Squirt, Red Rock, Pepsi-Cola, Seven Up, Nutrl, Bud Light Seltzer, Palm Bay, and Mike's brands. It offers its products through a network of third-party distributors and a direct distribution system. The company was founded in 1885 and is headquartered in São Paulo, Brazil. Ambev S.A. is a subsidiary of Interbrew International B.V.
How the Company Makes MoneyAmbev SA generates revenue through the sale of its diverse beverage portfolio across multiple markets in the Americas. The company's primary revenue stream is the production and distribution of beer, which includes both its own brands and international labels under licensing agreements. Non-alcoholic beverages such as soft drinks and energy drinks also contribute to its earnings. Ambev benefits from its extensive distribution network and economies of scale, allowing it to maintain competitive pricing and strong market presence. Additionally, strategic partnerships, such as those with PepsiCo, enhance its product offerings and market reach, further driving revenue growth.
Ambev SA Financial Statement Overview
Summary
Ambev SA exhibits strong financial health across all key areas. The income statement reflects solid profitability and growth, while the balance sheet highlights low leverage and effective capital management. The cash flow statement indicates excellent liquidity and cash generation, positioning the company well for future opportunities. While performance is commendable, slight income fluctuations suggest vigilance is necessary to maintain stability.Income Statement
Ambev SA has shown robust performance with a strong gross profit margin of 51.2% and a consistent net profit margin of 16.1% in 2024. The company experienced a healthy revenue growth rate of 12.2% from 2023 to 2024. Both EBIT and EBITDA margins are solid at 24.4% and 29.9%, respectively, indicating efficient operational management. Despite these strengths, slight fluctuations in net income across years suggest potential volatility.85
Very Positive
Balance Sheet
The balance sheet is strong with a low debt-to-equity ratio of 0.035, highlighting limited leverage risk. Ambev's return on equity is impressive at 14.6%, reflecting effective use of equity to generate profits. Additionally, the equity ratio stands at 60.7%, suggesting a stable capital structure dominated by equity. Minimal debt and substantial cash reserves contribute to the company's solid financial footing.88
Very Positive
Cash Flow
Ambev's cash flow statements reveal a robust free cash flow growth rate of 14.1% from 2023 to 2024, indicating strong cash generation capabilities. The operating cash flow to net income ratio remains robust at 1.81, and the free cash flow to net income ratio is 1.48, demonstrating efficient cash flow management and excellent liquidity. These metrics underscore Ambev's ability to fund operations and growth without relying heavily on external financing.90
Very Positive
| Breakdown | ||||
| Dec 2024 | Dec 2023 | Dec 2022 | Dec 2021 | Dec 2020 |
|---|---|---|---|---|
| Income Statement | Total Revenue | |||
| 89.45B | 79.74B | 79.71B | 72.85B | 58.38B | Gross Profit |
| 45.84B | 40.45B | 39.29B | 37.19B | 31.31B | EBIT |
| 21.80B | 18.83B | 17.69B | 17.08B | 15.97B | EBITDA |
| 26.72B | 23.46B | 23.08B | 22.87B | 20.77B | Net Income Common Stockholders |
| 14.44B | 14.50B | 14.46B | 12.67B | 11.38B |
| Balance Sheet | Cash, Cash Equivalents and Short-Term Investments | |||
| 29.84B | 16.34B | 15.38B | 18.54B | 18.79B | Total Assets |
| 162.51B | 132.64B | 137.96B | 138.60B | 125.20B | Total Debt |
| 3.45B | 3.50B | 3.85B | 3.10B | 4.79B | Net Debt |
| -25.14B | -12.56B | -11.08B | -13.53B | -12.30B | Total Liabilities |
| 62.93B | 52.50B | 54.63B | 54.58B | 50.05B | Stockholders Equity |
| 98.64B | 78.97B | 81.96B | 82.64B | 73.82B |
| Cash Flow | Free Cash Flow | |||
| 21.35B | 18.71B | 14.11B | 15.22B | 14.16B | Operating Cash Flow |
| 26.10B | 24.71B | 20.64B | 22.90B | 18.86B | Investing Cash Flow |
| -5.46B | -5.77B | -5.00B | -7.73B | -6.80B | Financing Cash Flow |
| -10.35B | -16.12B | -16.34B | -16.04B | -8.60B |
Ambev SA Technical Analysis
Positive
2.31
Price Trends
2.00
Positive
2.00
Positive
2.05
Positive
Market Momentum
0.10
Positive
66.96
Neutral
52.34
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For ABEV, the sentiment is Positive. The current price of 2.31 is above the 20-day moving average (MA) of 2.24, above the 50-day MA of 2.00, and above the 200-day MA of 2.05, indicating a bullish trend. The MACD of 0.10 indicates Positive momentum. The RSI at 66.96 is Neutral, neither overbought nor oversold. The STOCH value of 52.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for ABEV.
Ambev SA Risk Analysis
Ambev SA disclosed 49 risk factors in its most recent earnings report. Ambev SA reported the most risks in the “Legal & Regulatory” category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Ambev SA Peers Comparison
Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
83 Outperform | $36.93B | 13.57 | 16.55% | 4.43% | 3.69% | -8.13% | |
75 Outperform | $2.85B | 16.63 | 11.55% | 1.65% | 0.15% | 35.56% | |
74 Outperform | $122.63B | 21.17 | 7.31% | 1.04% | 0.64% | 10.02% | |
74 Outperform | $12.27B | 10.99 | 8.54% | 2.96% | -0.64% | 22.45% | |
72 Outperform | $16.05B | 16.12 | 27.99% | 2.57% | -5.11% | 3.64% | |
62 Neutral | $20.55B | 13.83 | -10.11% | 7.30% | 1.62% | 5.62% | |
61 Neutral | $2.68B | 48.25 | 5.99% | ― | 0.21% | -20.69% |
* Consumer Defensive Sector Average
Performance Comparison
ABEV
Ambev SA
2.31
0.03
1.32%
BUD
Anheuser-Busch Inbev Sa
62.14
1.70
2.81%
SAM
Boston Beer
240.39
-60.31
-20.06%
CCU
Compania Cervecerias Unidas SA
15.62
3.85
32.71%
TAP
Molson Coors
60.96
-4.29
-6.57%
BF.B
Brown-Forman B
34.49
-15.46
-30.95%
Ambev SA Earnings Call Summary
Earnings Call Date: Feb 26, 2025 | % Change Since: 23.53% | Next Earnings Date: May 8, 2025
Earnings Call Sentiment Neutral
Ambev demonstrated strong digital transformation and EBITDA growth, with significant free cash flow and strategic shareholder returns. However, challenges remain in Argentina and due to tax headwinds in Brazil, alongside pressures from brand underperformance and cost increases.Highlights
Digital Transformation Success
Over 88% of gross revenues transacted through BEES, Ambev's B2B platform, with 1.3 million monthly active buyers, marking a 14% increase from the previous year.
EBITDA Growth and Margin Expansion
Consolidated EBITDA grew by 11.4% organically, with margin expansion in all business units, delivering double-digit growth and gross and EBITDA margin expansion for the second consecutive year.
Free Cash Flow and Shareholder Returns
Free cash flow to equity increased by 37%, with nearly R$18 billion generated. The company also executed approximately 45% of its share buyback program and approved intermediary dividends of around R$2 billion.
Brazil Market Performance
Beer volumes in Brazil increased by 0.6% driven by market share gains. Non-alcoholic beer volumes rose by 4.1%, and NAB volumes grew by 4.1% led by Guarana Antarctica.
Strong Performance in Dominican Republic and Canada
Dominican Republic volumes grew by mid-single digits, achieving all-time high volumes for the Presidente family. In Canada, mega brands grew volumes by low-single digits.
Lowlights
Argentina's Challenging Environment
The beer industry in Argentina declined by low 20s due to a challenging consumer environment, although market share remained stable.
Impact of Tax Headwinds in Brazil
Significant tax headwinds in Brazil resulted in a nearly R$3.5 billion negative impact due to less tax deductibility, contributing to a 2.3% decline in normalized profit.
Skol Brand Underperformance
Skol volumes declined, posing a priority for improvement in 2025, impacting the overall portfolio despite being one of the core brands.
Cost Pressures and FX Challenges
Expectations of cash COGS per hectoliter in Brazil beer to grow between 5.5% and 8.5% in 2025 due to depreciation of the Brazilian real and increased aluminum prices.
Company Guidance
During Ambev's 2024 Fourth Quarter Results Conference Call, CEO Carlos Lisboa highlighted several key metrics showcasing the company's performance and future guidance. Over the past five years, Ambev reported a 37% growth in consolidated EBITDA and generated nearly R$65 billion in free cash flow to equity, with significant investments amounting to approximately R$30 billion in CapEx and R$33 billion in sales and marketing. For the year 2024, volumes excluding Argentina increased by 1.4%, with mega brands experiencing a 7.6% growth. Digital initiatives also saw progress, with BEES achieving 1.3 million monthly active buyers, a 14% increase from the previous year. Zé Delivery in Brazil fulfilled over 66 million orders, marking a 10% growth compared to 2023. The company also announced a capital allocation strategy, executing approximately 45% of its current share buyback program and distributing intermediary dividends of around R$2 billion, with a focus on continuing margin expansion despite expected cost headwinds in 2025.Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.