Anheuser-Busch Q2 Earnings Miss Analysts' Estimates, Celsius Soars to 20% Gain

Anheuser-Busch (BUD) Q2 revenues down 2.1% YoY, missing analysts' estimates by 1.9%. The company's EBITDA was in line with expectations. The stock is down 6.5% since reporting. Celsius (CELH) reported a strong Q2, with revenues up 83.9% YoY and beating analysts' estimates by 14%. Tilray (TLRY) had the weakest Q2 performance among peers.

Anheuser-Busch InBev (BUD) reported a 2.1% year-over-year (YoY) decline in Q2 2025 revenues, missing analysts' estimates by 1.9%. Despite this, the company's EBITDA remained in line with expectations, underscoring its operational efficiency. The stock has since declined by 6.5% since the earnings report, creating a potential investment opportunity for long-term investors.

The immediate trigger for the sell-off was a 2.15% YoY revenue decline, driven by volume softness in key markets like China and Brazil. However, a deeper analysis reveals that BUD's financials tell a different story. The company reported a 6.5% increase in EBITDA and a 116-basis-point margin expansion to 35.3%, demonstrating its ability to navigate macroeconomic challenges through pricing discipline and cost optimization [1].

The stock's current valuation metrics further underscore the disconnect between fundamentals and market sentiment. At a forward P/E of 14.59—below its five-year average of 18.07—and a P/FCF of 9.41 (well below its five-year average of 13.49), BUD appears undervalued. The EV/EBITDA ratio of 8.64 also sits below its historical average of 10.14. These metrics suggest the market is pricing in a worst-case scenario, despite the company's consistent free cash flow generation and robust balance sheet [1].

BUD's historical resilience during economic downturns adds to its appeal. In 2024, the company generated $11.32 billion in free cash flow—a 28.89% increase from 2023—despite pandemic-related disruptions and the 2020-2022 inflation shock. Its net debt-to-EBITDA ratio has improved to 3.27x, reflecting progress in deleveraging, and its bond portfolio is well-distributed with no immediate refinancing risks [1].

Beyond financial metrics, BUD's strategic initiatives position it to capitalize on long-term trends. The company is expanding its non-alcoholic beverage portfolio, with a 33% revenue increase in Q2 2025 led by products like Corona Cero. It's also diversifying into energy drinks via a partnership with 1st Phorm, tapping into a rapidly growing $27 billion U.S. market. Digitization further strengthens its competitive edge, with the BEES Marketplace generating $785 million in GMV in Q2 2025—a 63% year-over-year increase—while its omnichannel DTC ecosystem contributed $335 million in revenue [1].

Critics may point to BUD's challenges in North America, where Bud Light's sales have declined due to consumer backlash over its 2023 marketing campaign. However, management has responded with targeted initiatives to rebuild the brand, including a renewed focus on traditional values and heritage. The company's ability to maintain a 23.5% operating margin in 2023, despite these headwinds, highlights its operational flexibility [1].

For long-term value investors, BUD's current valuation represents a compelling entry point. The stock trades at a discount to its historical averages, supported by a strong free cash flow profile and a deleveraged balance sheet. Its strategic investments in premiumization, digitization, and new product categories further enhance its long-term value proposition [1].

While macroeconomic risks persist, BUD's history of navigating downturns and its disciplined capital allocation provide a margin of safety. Investors willing to look beyond short-term volatility may find that the recent sell-off is a golden opportunity to acquire a stable, cash-flow-driven business at a price that doesn't fully reflect its intrinsic value [1].

References:
[1] https://www.ainvest.com/news/anheuser-busch-inbev-overdone-sell-offers-attractive-investment-opportunity-2508/
[2] https://www.marketbeat.com/instant-alerts/filing-everett-harris-co-ca-has-1482-million-stock-position-in-anheuser-busch-inbev-sanv-nysebud-2025-08-08/