UBS Raises Ambev (ABEV) PT to $2.70, Keeps Neutral Rating

On Wednesday, UBS raised its price target for Ambev (NYSE:ABEV) from $2.60 to $2.70, while maintaining a Neutral rating on the shares. This adjustment reflects UBS’s updated analysis of the company’s market position and prospects.

A close-up on several cans of freshly brewed beer in a commercial brewery.

Ambev released its Q1 2025 key business developments on May 8 and reported a high single-digit increase in top-line revenue, with volume growth of 0.7%, achieving an all-time high for the first quarter. Net revenue per hectoliter increased by ~6%. Despite a tough comparison due to a one-off tax benefit in the previous year, net income was virtually flat, with normalized net income at BRL 3.8 billion. Cash flow from operating activities increased by 68% year-on-year to BRL 1.2 billion.

Ambev also saw growth in digital transactions, with GMV increasing by 60% and DTC orders rising by 5%. The company maintained a stable market share in key regions such as Brazil and Argentina, with strong performances from premium and non-alcoholic beer segments. However, the company anticipates foreign exchange/FX and commodities pressure starting in Q2 2025, which could hinder margin expansion efforts.

Ambev (NYSE:ABEV) produces, distributes, and sells beer, draft beer, carbonated soft drinks, malt & food, other alcoholic beverages, and non-alcoholic &  non-carbonated products in Brazil, Central America & Caribbean, Latin America South, and Canada.

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Disclosure: None. This article is originally published at Insider Monkey.