Anheuser-Busch (NYSE:BUD) is a conglomerate that produces, distributes, markets, and sells beer and beverages around the world. It is the largest brewing company on the planet, boasting top brands like Budweiser, Stella Artois, Beck, and others. However, it has found itself in the headlines for reasons no analyst would have predicted a year ago.
Shares of Anheuser-Busch have dropped 10% month-over-month as of close on May 23. That has pushed the stock into negative territory in the year-to-date period in 2023. The company appeared to be riding high in late March and early April. However, its Bud Light brand unknowingly waded into dangerous waters as its consumers took issue with a recent sponsor.
Initially, the outrage was not taken all that seriously as management hoped the controversy would come and go with the spinning of the news cycle. However, recent data suggests that sales suffered a steep drop of 25% or more in the month of April. This spurred HSBC analysts to downgrade Anheuser-Busch stock.
It is difficult to determine how long-standing the negative sales impact could be in the wake of this controversy. In the near term, its advertising department has shifted to a more conventional approach in a bid to calm its consumer base.
Despite the controversy, Anheuser-Busch delivered solid revenue growth of 13% in the first quarter of fiscal 2023. Meanwhile, normalized EBITDA climbed 13% to $4.75 billion. This stock is trading in favourable value territory compared to its industry peers. Now is the time to pounce in the midst of the “Bud Light crisis”.