Budweiser brewer looks cheap after pullback from summer highs, says Wells Fargo

Wells Fargo initiated Anheuser‑Busch InBev at overweight with a $75 price target, implying roughly 23% upside from Tuesday’s close; the stock has rallied 22% year‑to‑date but remains near multidecade lows and about 15% below its June high. Analyst Chris Carey points to near‑term catalysts such as the World Cup, models a FY25 volume trough (‑2.6% y/y) followed by a return toward historical multi‑year CAGR into 2026, and highlights a potential FX tailwind that could drive the best earnings growth in six years. Carey also expects a steady, not abrupt, margin recovery as pricing has offset past inflation and easing input costs should allow gradual margin and earnings improvement, underpinning the bullish case for upside.

Analysis

Wells Fargo initiated coverage of Anheuser-Busch InBev with an overweight rating and a $75 price target, implying roughly 23% upside from Tuesday's close; the stock has already rallied 22% year-to-date but remains near multidecade lows and about 15% below its June high. The initiation notes valuation still looks cheap versus mega-cap peers and versus the company's own earnings growth, which underpins the analyst's upside view despite recent outperformance.

Analyst Chris Carey identifies volume as a near-term headwind—he models FY25E segment volume down about 2.6% year-over-year, the third straight annual decline and the lowest on record excluding 2020—but points to long-term volume trends of +0.5% (FY16–FY24 and FY16–FY19) and expects a return toward that multi-year CAGR into 2026. Carey highlights the World Cup as a near-term catalyst that could accelerate volumes and supports his modeling of a gradual recovery.

Carey also flags currency as a potential tailwind (first positive reading in nine years) that, combined with steady margin recovery from pricing that offset prior inflation, could deliver the best earnings growth in six years; however, he explicitly cautions that margin recovery is likely steady rather than rapid. Key risks remain FX volatility, execution on pricing and cost recovery, and the timing of volume normalization, which together control the path to the $75 target.

Key Decisions for Investors

• Consider a tactical overweight position in BUD sized to account for near-term volume risk given the analyst $75 target implies ~23% upside,
• Monitor World Cup consumption data, FX trends and FY25 volume/earnings revisions over the next two quarters and be prepared to trim or hedge if guidance deteriorates,
• Use staged exposure or defined-risk option structures (e.g., call spreads) to capture upside from a presumed gradual margin and volume recovery while limiting downside if the recovery proves slower than modeled