Barclays analyst Laurence Whyatt highlighted that Brazil is a crucial market for Anheuser-Busch, contributing approximately 11% of the company's consolidated revenues and 48% of Ambev's EBITDA. The new 'sin tax' on alcohol, set to take effect in January 2027, poses a significant challenge as it directly targets a substantial portion of Ambev's profits.
Additionally, the end of the World Cup is expected to create tough year-over-year comparisons, as previous tournaments have shown that any increase in alcohol consumption tends to be temporary. Whyatt expressed concerns that the company's current valuation, at over 18 times forward earnings, is too high compared to competitors like Heineken and Carlsberg.
He believes that the combination of Brazil's market maturity, the uncertainty surrounding the new tax, and the difficult comparisons following the World Cup will undermine the growth that has previously justified Anheuser-Busch's premium valuation. Following this downgrade, shares of Anheuser-Busch experienced a slight decline