ABEV changes
Pick any two versions below to diff them.
- Price
- $3.28 → $2.80(−14.6%)
- Discount category
- Close to intrinsic value → Well below intrinsic value
- Next earnings
- Oct 29, 2026 → Jan 29, 2027
- Next earnings is estimate
- No → Yes
- About
- Ambev is the largest brewer in Brazil and makes beer and soft drinks in Latin America and Canada. Its brands include Brahma, Skol, Antarctica and Guarana Antarctica, and it also sells AB InBev brands such as Corona and Spaten in its markets. It reports five business units: Brazil Beer, Brazil non-alcoholic beverages (NAB), Central America and the Caribbean (CAC), Latin America South (LAS, which includes Argentina and Bolivia) and Canada. Brazil Beer is the largest unit, with removed: R$9.8 added: R$10.1 billion of the removed: R$20.1 added: R$21.6 billion of net revenue in removed: Q2 added: Q3 2026. Ambev makes money from the margin between the price of its drinks and the cost of malt, aluminum cans, sugar and distribution. It sells to small bars and shops through its BEES ordering app and to consumers through the Ze Delivery app. In 2025, its normalized EBITDA was R$29.5 billion, with a margin of 33.4%. AB InBev owned 62.3% of its shares on February 18, 2026.
- Thesis
- Ambev trades at a discount because the market doubts that its 2026 beer growth will last. Total volume fell 3.3% in 2025. In Q2 2026, Brazil beer volume grew 5.0%, but part of this growth came from the FIFA World Cup, which does not repeat in 2027. added: In Q3 2026, Brazil removed: soft drink added: beer volume added: grew only 0.5%, and Brazil beer EBITDA margin fell removed: 4.4%, added: 1.3 points because costs and removed: volumes added: marketing spend rose. Volumes fell added: again in Latin America South and Canada. Investors also fear Brazil's new Selective Tax on alcoholic drinks, which is to start on January 1, 2027. As of removed: June added: October 29, 2026, the government had not set the rates, so the future tax cost on beer is not known. added: On October 27, 2026, a press report said that the government plans to keep the 2027 tax burden near the current level and to set new rates from 2028. Costs are a third concern, because management expects Brazil beer cash cost per hectoliter to rise 4.5% to 7.5% in 2026. For the gap to close, Brazil beer volume must keep growing after the World Cup, normalized EBITDA must keep growing faster than revenue, and the Selective Tax rate on beer must keep the total tax burden near its current level. Ambev must also keep its net cash position while it pays interest on capital and buys back shares. The removed: first test is the Q3 2026 report on October 29, removed: 2026. added: 2026 passed: volume grew in Brazil beer and soft drinks, and normalized EBITDA grew 8.9%. The removed: second test is added: next tests are the added: Selective Tax rates, which the government must still publish, and the full-year 2026 removed: report, expected added: report in removed: February added: early 2027, with the first view of 2027 after the tax starts. If volumes hold and the tax stays neutral, the gap can close over the next two to four quarters. The main risk is a high Selective Tax rate that forces price increases and cuts beer volume.
- Risks
- Brazil's new Selective Tax on alcoholic drinks is to start removed: on January 1, added: in 2027. As of removed: June added: October 29, 2026, the government had not removed: set added: published the removed: rates, and the Ministries added: rates. A press report of removed: Finance and Health did not agree on added: October 27, 2026 said that the removed: model. added: government plans to keep the 2027 burden near the current level, but rates from 2028 are not known. A high rate on beer can force price increases and cut volume in Ambev's largest business. Beer demand in Brazil depends on consumer income, weather and large events. Total volume fell 3.3% in 2025. Part of the Brazil beer growth in Q2 2026 came from the FIFA World Cup, so 2027 has a harder comparison. added: In Q3 2026, Brazil beer volume grew only 0.5%. Costs rise. Management expects Brazil beer cash cost per hectoliter to rise 4.5% to 7.5% in 2026, from commodity prices such as aluminum and malt and from a weaker real against the US dollar. If Ambev cannot raise prices enough, its margin falls. Ambev reports in Brazilian reais, and the ADR trades in US dollars, so a weaker real lowers the ADR value of its profits. Argentina adds hyperinflation, which reduced profit by R$123.4 million in Q2 2026, and Bolivia had social unrest that cut volume in Q2 2026. AB InBev controls Ambev with 62.3% of its shares (72.6% with the FAHZ foundation) on February 18, 2026. Minority shareholders have little influence on strategy, dividends or deals with AB InBev.
- Balance sheet
- Cash: removed: R$18.3B added: R$21.9B Debt: removed: R$2.9B added: R$2.7B Net cash: removed: R$15.4B added: R$19.2B EBITDA, last 12 months: removed: R$29.8B added: R$30.1B Interest cover: 10× Debt due within 12 months: removed: R$1.1B added: R$997M Ambev had net cash of removed: R$15.4 added: R$19.2 billion at removed: June added: September 30, 2026, removed: down added: up from added: R$15.4 billion at June 30, 2026 and R$16.9 billion at December 31, removed: 2025, because it paid interest on capital and bought back shares. added: 2025. Cash includes removed: R$16.6 added: R$19.2 billion of cash and equivalents, net of bank overdrafts, and removed: R$1.7 added: R$2.7 billion of short-term investment securities. Debt is small: removed: R$1.1 added: R$1.0 billion is current and removed: R$1.9 added: R$1.7 billion is non-current. EBITDA is normalized EBITDA for the 12 months to removed: June added: September 2026. Interest cover is normalized operating profit of removed: R$10.8 added: R$16.4 billion divided by interest expense of removed: R$1.1 added: R$1.6 billion in the first removed: half added: nine months of 2026. Interest income of removed: R$1.2 added: R$1.8 billion was larger than interest expense in that period. Operating cash flow was removed: R$4.7 added: R$7.7 billion in removed: Q2 2026. added: Q3 2026, up 11.0%. In removed: 2025, the removed: Board declared R$13.2 added: first nine months of 2026, Ambev paid R$2.6 billion of dividends and removed: R$4.2 billion of interest on removed: capital. In added: capital and R$3.3 billion for share buybacks. On October 28, 2026, the removed: first half added: Board approved a new buyback of removed: 2026, Ambev returned about R$5.9 billion added: up to removed: shareholders before withholding tax. added: 190 million shares, about R$2.9 billion. As of removed: Jun added: Sep 30, 2026.
- Checkpoints
- Oct 29, 2026: Q3 2026 results: Brazil beer volume and margin. removed: Pending. added: Passed. Watch: Brazil beer volume that still grows after the World Cup and normalized EBITDA growth above revenue growth pass; a fall in Brazil beer volume or a lower EBITDA margin fails. added: Outcome: Brazil beer volume grew 0.5% and normalized EBITDA grew 8.9% against revenue growth of 7.6%, though the Brazil beer EBITDA margin fell 1.3 points. Q4 2026 (estimate): Selective Tax rates on beer. Pending. Watch: Rates that keep the total tax burden on beer near its current level pass; a rate that forces large price increases on beer fails. removed: Feb added: Jan 29, 2027 (estimate): Full-year 2026 results and 2027 view. Pending. Watch: Positive beer volume for 2026, stable net cash and a clear plan for the Selective Tax pass; lower volume or a lower margin in Brazil beer fails.
- Recent events
- Oct added: 29, 2026: Ambev reported Q3 2026 results. Net revenue was R$21.6 billion, up 7.6% on an organic basis, and total volume grew 0.8%. Normalized EBITDA was R$7.3 billion, up 8.9%, with a margin of 33.7%. Brazil beer volume grew 0.5% and Brazil beer EBITDA grew 1.0%. Brazil soft drink volume grew 3.6%. Normalized profit was R$4.4 billion, up 14.3%. Management kept its 2026 cost guidance and said it had hedged its real to US dollar exposure for all of 2027. Oct 28, 2026: The Board approved a new share buyback program of up to 190 million common shares, about R$2.9 billion at the October 28 closing price, to run until April 28, 2028. Ambev plans to cancel most of the shares it buys. Oct 27, 2026: A press report said that Brazil's finance minister expected to send the provisional measure with the Selective Tax rates that week. The report said that the government plans to keep the 2027 tax burden near the current IPI tax level and to set new rates from 2028. The rates were not published by October 29, 2026. Oct 6, 2026: Ambev paid the last tranche of the interest on capital that it declared in December 2025, R$1.9 billion before withholding tax. Jul 30, 2026: Ambev reported Q2 2026 results. Net revenue was R$20.1 billion, up 6.1% on an organic basis. Normalized EBITDA was R$6.4 billion, up 8.9%, with a margin of 31.6%. Brazil beer volume grew 5.0%, helped by the FIFA World Cup, and Brazil beer EBITDA grew 12.8%. Brazil soft drink volume fell 4.4%. Volume in Latin America South fell 2.9%, because social unrest and road blockades in Bolivia cut Bolivian volume by a double-digit percentage. Management kept its 2026 cost guidance. Jul 29, 2026: The Board approved a new interest on capital payment of about R$1.1 billion before withholding tax, to be paid by December 2026. Ambev said it had completed about 95% of the share buyback program it announced in October 2025. Jun 11, 2026: Press reports said that the Brazilian government plans two rates for the Selective Tax on alcoholic drinks: one based on the volume of pure alcohol and a second rate that is not yet defined. The tax is to start on January 1, 2027, and Congress must still set the rates. May 5, 2026: Ambev reported Q1 2026 results. Net revenue grew 8.1% on an organic basis, and normalized EBITDA grew 10.1%, with a margin of 33.6%. Total volume was flat (up 0.1%), and Brazil beer volume grew 1.2%. Normalized profit was R$3.8 billion, up 0.3%, because net finance costs rose. The Board approved a new interest on capital payment of about R$700 million.