25 October, 2006

USA: Anheuser-Busch was downgraded at UBS to ‘reduce’ from ‘neutral’

Anheuser-Busch was downgraded at UBS to ‘reduce’ from ‘neutral’, citing concerns over increased discounting, weak volume trends, growing threat of imported light beer and high valuation, MarketWatch informed October 24.

Analyst Kaumil Gajrawala also cut his stock price target to $46 from $50, his 2006 earnings estimate to $2.54 a share from $2.56 and his 2007 forecast to $2.82 a share from $2.86. "According to industry sources, September and early-October volumes were weak, leading to high trade inventories," Gajrawala said in a note to clients.

"Moreover, we understand that Anheuser-Busch has also increased promotional activity for Thanksgiving, likely driven by weak volumes since Labor Day." The stock closed October 23 up 27 cents at $47.59.

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