AB InBev is the largest brewer in the world. The company produces, markets, distributes, and sells a portfolio of over 500 beer brands. Its global flagship brands include Budweiser, Stella Artois, and Beck's. In addition, the company brews and distributes the Corona brand through its operating Mexican subsidiary, Grupo Modelo. Following its acquisition of SABMiller a few years ago, the company also has a major presence in Africa. In South Africa, it owns the Castle and Black Label brands, among others.
ANH is geographically diversified with exposure to both developed and developing markets. Revenue and volumes have recovered to being ahead of pre-pandemic levels, despite a highly boycotted marketing campaign that put pressure on Budweiser volumes in the US more recently.
Technically, the price action indicates the start of wave 5 of the Elliott wave theory (see the wave count 1 to 5 on the main chart as well as the insert). In the Elliott Wave Theory, wave 5 represents the final impulse wave in a typical five-wave trend sequence. The price action at the start of wave 5 signals the last phase of the prevailing trend. This wave is typically characterised by a surge in price as the trend makes its final push upwards.
The share is testing its 200-day simple moving average of R1 076.80. The share is also testing its 38.2% retracement level, which is a moderately bullish sign.
Fading downside momentum, according to the MACD indicator, supports our bullish stance. This is further emphasised by the sideways movement of the OBV indicator, which suggests that money remains in the share.
Share Information
| Share Code | ANH |
|---|---|
| Industry | Food, Beverage & Tobacco |
| Market Capital (ZAR) | 2.16 trillion |
| One Year Total Return | 15.63% |
| Return Year-to-Date | 6.23% |
| Current Price (ZAR) | 1 073.73 |
| 52 Week High (ZAR) | 1 232.01 |
| 52 Week Low (ZAR) | 917.00 |
| Financial Year End | December |
| The share price has performed well over the last 12 months and has seen modest growth YTD. Several technical indicators are pointing to further upside potential. |
Consensus expectations
(Bloomberg)
| FY23 | FY24E | FY25E | FY26E | |
|---|---|---|---|---|
| Headline Earnings per Share (USD) | 3.01 | 3.51 | 4.04 | 4.67 |
| Growth (%) | 16.73 | 15.16 | 15.54 | |
| Dividend Per Share (USD) | 1.03 | 1.33 | 1.65 | 1.95 |
| Growth (%) | 29.77 | 23.61 | 18.07 | |
| Forward PE (times) | 19.67 | 16.85 | 14.63 | 12.61 |
| Forward Dividend Yield (%) | 1.74 | 2.26 | 2.79 | 3.30 |
| Robust earnings growth is expected over the short to medium term. | ||||
Buy/Sell Rationale
Technical Analysis:
Long-term fundamental view:
| Share Name and position | ANG - Close (Stop-loss) |
CLS - Close (Take profit) |
LHC - Close (Time to exit) |
|---|---|---|---|
| Entry | 369.83 | 264.56 | 20.53 |
| Current | 319.12 | 287.06 | 18.50 |
| Movement | -13.4% | 8.5% | -9.9% |
| The share price breached our stop-loss level, and thus we closed the position. | The share is currently trading in overbought territory. As such, we have closed the trade and took profit to protect from downside risk. | The trade has reached the recommend time to exit of 6 November 2023. |
| Share Name and position | DCP - Buy (Continue to hold) |
APN - Buy (Continue to hold) |
STXRES - Buy (Continue to hold) |
|---|---|---|---|
| Entry | 24.12 | 182.66 | 59.63 |
| Current | 25.25 | 180.50 | 58.10 |
| Movement | 4.7% | -1.2% | -2.6% |
|
The share continues to display signs of bullish divergence. The price is testing its 200-day simple moving average. The price action also seems to be building a base.
Our profit target is R29, with a trailing stop-loss at R23.50. Close the position around 29 December 2023. |
The formation of a symmetrical triangle pattern in the share price remains attractive. The share has crossed above its 200-day simple moving average, with fading downside price momentum supportive of the trade idea.
Our profit target is R222, with a trailing stop-loss at R160. Exit the trade around 27 December 2023. |
The ETF is trading at major support in an accumulation phase and remains below the 200-day simple moving average. Some downside price momentum is a concern.
Our profit target is R69, with a trailing stop-loss at R56. Exit the trade around 8 January 2024. |
