Bud light is now selling for less than water at some US warehouses, but is BUD stock too cheap to pass up? 1 reason to pick it up now

Bud Light has been in an uphill battle since partnering with transgender social media influencer Dylan Mulvaney in April.

While Mulvaney has 10.7 million followers on TikTok, the collaboration sparked a backlash on social media and led to boycotts by some beer drinkers.

The New York Times recently reported that at the Glenn Miller Beer and Soda Warehouse in Lemoyne, Pennsylvania, a 30-pack of Miller Lite sold for $24.99. In contrast, a 30-pack of Bud Light is priced at just $8.99 after discount.

“At this point, it’s cheaper than some of the crates of water we sell in the back,” said Andy Wagner, warehouse manager. “It just doesn’t move like it used to.”

Wagner noted that Bud Light sales in his store since mid-April are down 45% from a year ago. The decline can be attributed to the evolution of consumer preferences.

“It’s not that they stopped drinking beer,” he said. “They stopped buying Bud Light.”

shares Anheuser-Busch InBev (NYSE: BUD), the multinational brewing company behind Bud Light, has also seen success. Since April 1, when Mulvaney first promoted the beer on social media, NYSE-listed BUD stock has fallen about 12%.

While this share price drop has resulted in billions of dollars in lost market value, the situation may present an opportunity for ambivalent investors.

paying off:

Headwinds are likely to fade

It’s no secret that Bud Light has been losing market share.

According to consulting firm Bump Williams, using data from NielsenIQ, Bud Light is no longer the best-selling beer in America. The top spot now belongs to Modelo Especial, brewed by Constellation Brands (NYSE:STZ).

Bud Light’s declining market share is a worrying outlook for AB InBev (ABI), but Deutsche Bank analyst Mitch Collett sees potential in the company.

“We believe recent weak performance means a permanent decline in ABI’s US business. Our property survey data indicates that these headwinds are likely to dissipate even if we don’t expect the US business to fully recover from its current challenges,” the analyst wrote in a recent report. Research note.

Collett upgraded its rating on AB InBev from Hold to Buy and raised its target price for shares of the European-listed company from €59 ($65.12) to €60 ($66.22).

Given that the stock is currently trading at €53.52 ($59.07), the analyst’s new price target indicates a potential upside of 12.1%.

Colette’s point is that although Bud Light’s situation is unfavorable, there is potential for improvement in the future.

“Taken together, the survey data shows that Bud Light as a brand faces significant challenges—particularly with older consumers,” he wrote. “However, we believe that forward-looking statements imply that the challenges will at least partially pass.”

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