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Strong Rebound for Ambev in Q1 Fiscal 2021, but Volume Jump Not Likely Sustainable

Analyst Note

| Philip Gorham, CFA, FRM |

Ambev reported a strong first quarter in 2021, beating our estimates on better-than-expected volume in Brazil and Latin America South. We have pulled forward the timing of the rebound in our assumptions, and maintain our BRL 18 fair value estimate. We think Ambev is a very high quality franchise, and it offers a different risk profile for investors who wish to avoid the balance sheet risk of parent company AB InBev. We expect this first-quarter report to be well received by investors, but still see upside from the current market price.

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Company Profile

Business Description

Ambev is the largest brewer in Latin America by volume and the fourth- largest beer producer in the world. It produces, distributes, and sells beer and PepsiCo products in Brazil and other Latin American countries. It also owns Argentina's largest brewer, Quinsa. Ambev was formed in 1999 through the merger of Brazil's two largest beverage firms, Brahma and Antarctica. In 2004, Ambev combined with Canadian brewer Labatt, giving Interbrew (now Anheuser-Busch InBev) a controlling interest.

Rua Dr. Renato Paes de Barros, 1017, 3rd Floor
Sao Paulo, SP, 04530-001, Brazil
T +55 1121221200
Sector Consumer Defensive
Industry Beverages - Brewers
Most Recent Earnings Mar 31, 2021
Fiscal Year End Dec 31, 2021
Stock Type
Employees 50,479