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

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.