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Analysis of the Anheuser-Busch Company

In: Business and Management

Submitted By willem
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Pages 34
Analysis of the Anheuser-Busch Company
Report by Valanium Analysts: Chris Rigopulos, John Schneider, Jayne Tan Investment Recommendation: MARKET PERFORM December 5, 2001

BUD – NYSE (11/30/01) 52 week range Revenue (2001E) Market Capitalization Share Outstanding

$43.10 $36.75 – $49.00 $14.9B $38.2 B 884.3M

EPS Forecast (FYE 12/30) EPS Ratios Trailing P/E Forward P/E Leading PEG M/B Price/Sales

1999A 2000A 2001E 2002E $1.49 $1.71 $1.89 $2.09

Dividend Yield 1.67% Avg. Daily Trading Volume (3mo) 2.13M Book Value per Share (mrq) Return of Equity (ttm) Return on Assets (ttm) Est. 5 Years EPS Growth Rate Sector: Consumer/Non-Cyclical Industry: Beverages (Alcoholic) $4.83 40.39% 10.71% 11.0%

BUD 23.2 20.6 1.87 8.93 3.11

Competitors Avg. 17.4 15.9 1.37 3.10 1.21

Valuation Predictions Actual Current Price Trailing P/E Valuation Leading P/E Valuation PEG Valuation M/B Valuation Price/Sales Valuation EBO (Abnormal Earnings) Valuation DCF Valuation Performance (Trailing, Annualized) Return on BUD Return on S&P 500 Return on Competitors

$43.10 $32.38 $33.24 $31.48 $14.95 $16.73 $19.25 $46.87

6 mo -2.1% 18.3% - 2.9%

12 mo 24 mo -7.4% 9.9% -13.4% -10.3% 2.1% 8.9%

Source: finance.yahoo.com, Valanium analysis





Our valuations reflect a range of predictions, all falling below the current price point with the exception of the DCF estimate. However, we believe that A-B’s brand value and domestic presence are not captured within the accounting numbers and can justify for the seeming price premium. BUD’s success will hinge in the near term on its involvement in the burgeoning malternatives market and in the longer term on its ability to penetrate the international scene. Given the lack of detail surrounding the Bacardi Silver launch and encroachment of international players in the US market (not to mention the threat of consolidation), we...

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