ABI's 5.8% Q2 Earnings Beat Helped-But Is €75.2 Really Cheap Anymore?

Q2 results improved the story, but they also changed the starting point

ABI's quarter did more than beat expectations. It changed the debate.

Earlier, investors could fairly describe Anheuser-Busch as a battered beer leader the market had written down. Now, forecast-beating revenue, profit and volumes make that narrative harder to sustain. Q2 revenue rose 5.6%, EBITDA increased 5.8%, and underlying EPS reached $1.21, up 23.4%. The market is increasingly treating ABI less like a distressed asset and more like a better-quality business trading at a discount.

What improved in the quarter

ABI delivered forecast-beating revenue, profit and volumes, supported by 1.1% beer volume growth and global market-share gains. First-half free cash flow reached $3.9 billion, while net debt/EBITDA improved to 2.86x. That is not the profile of a company waiting for a miracle. It is a business with more room to deleverage, fund payouts, and still reinvest.

That matters because the stock's starting point is no longer 'deep discount.' ABI last closed at €75.2, after gaining 38.2% year to date and 52.4% over the past year. The easy rerating from despair is largely over.

The operating gains look real, but one-region weakness still matters

What the market is rewarding

Investors are responding to more than a single good quarter. After years of softness in the brewing sector, consecutive quarters of volume growth strengthen the case that ABI's recovery is becoming more durable.

The breadth of the improvement supports that view. ABI showed global market-share gains, and growth was not limited to price increases. Mega-brand revenue rose 6.2%, non-alcohol revenue grew 27%, and record high second-quarter volumes in Mexico, Colombia, Ecuador suggest the strength was not confined to one market.

Revenue management also held up well. Revenue per hectoliter increased 4.2%, while EBITDA margins remained broadly stable despite higher sales and marketing spending. That points to execution quality, not just a favorable product mix.

The part bulls still have to explain

China remains the clearest drag. Revenue there fell 8.8%, pressured by a high-single-digit industry decline, adverse weather, and softness in on-premise channels. Management said market-share trends improved sequentially, but also that substantial execution work remains.

That is the real bull-bear divide now. Bulls can argue China is a timing issue and that the rest of the portfolio is strong enough to carry the company through a weak patch. Bears can argue that a global brewer still losing nearly 9% in a major market is not yet operating at the level the stock's rerating implies. For now, the next few quarters should matter more than any single report.

What to watch next

• Whether volume and share gains stay broad-based
• Whether China stabilizes instead of worsening
• Whether ABI can maintain margins while keeping growth drivers intact

After the rerating, ABI looks better-but not obviously deep-value cheap

Cheap looks different after a big move

ABI's last quoted price of €75.2 changes the whole framing. A stock can still trade at a 'low' multiple after the easiest part of the rerating is already done.

On the surface, the valuation still looks modest: roughly EV/EBITDA of 5.95x and a forward P/E around 6.5x. But those multiples sit above the cited fair-value range of €54.37 to €64.57. A reasonable takeaway is not that ABI is suddenly expensive. It is that the stock is no longer obviously cheap in the deep-value sense.

Earnings quality now has to support the price

Q2 revenue reached $16.66 billion, while net income and margin improved sharply versus a year earlier. The exact figures vary by reporting basis across sources, but the broader signal is clear: profitability is recovering, and the business looks firmer than it did 12 months ago.

That makes this quarter a valuation test as much as an earnings beat. The easier case-'cheap plus proof'-has largely been made. The harder case now is whether future earnings growth can justify a share price that already reflects a better business.

A more disciplined way to frame the stock

• View ABI more as a compounding holding than a deep-value sprint.
• Assume less room for dramatic multiple expansion and more dependence on steady execution.
• Watch China, pricing power, and whether volume growth remains broad-based.

If those drivers hold, the stock may still do well. If they weaken, the market may conclude ABI is higher quality than it once seemed-but not necessarily cheap enough to have escaped that label entirely.