USA: Anheuser-Busch downgraded to ‘underperform’ as stock overshot its fair value

Sanford C. Bernstein downgraded September 07 Anheuser-Busch Cos. Inc., citing the U.S. beverage sector's high valuation and limited upside, Reuters communicated September 07.

Bernstein analyst Robert van Brugge downgraded Anheuser-Busch shares to "underperform" from "market perform."

"We recommend a modest underweight exposure to the sector and suggest investors avoid Anheuser-Busch at these prices."

The stock of Anheuser-Busch, brewer of Budweiser beer, has overshot its fair value, Brugge wrote, since growth is unlikely to rebound to the high levels of several years ago.

Within the beverage sector, Bernstein favours Fortune Brands Inc., which owns Jim Beam Bourbon, and Molson Coors Brewing Co. Both are rated "outperform."

Based in St. Louis, Anheuser-Busch is the leading American brewer. The company brews the world's largest-selling beers, Budweiser and Bud Light. Anheuser-Busch also owns a 50 percent share in Grupo Modelo, Mexico's leading brewer, and a 27 percent share in Tsingtao, the No. 1 brewer in China. The company also is one of the largest theme park operators in the United States, is a major manufacturer of aluminum cans and is America's top recycler of aluminum cans.

Anheuser-Busch shares slipped 1.9 percent to $47.10 on September 07 in morning trade on the New York Stock Exchange.

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