AB InBev (BUD) Intrinsic Value (StockWatch DCF)
Data & Assumptions: AB InBev’s 5-year beta is 0.87stockanalysis.com. The 10-year US Treasury yield (risk-free rate) is about 4.29%ycharts.com. We use a market risk premium of 5.5%, giving a CAPM cost of equity ≈ 4.29% + 0.87×5.5% ≈ 9.1%. Historical free cash flows (FCF) were roughly $7.11B (2020) and $9.16B (2021)stockanalysis.com, about $8.5B in 2022via.tt.se, $8.8B in 2023 and $11.3B in 2024cdn.builder.io. Net debt is ~$60.6B (end-2024)cdn.builder.io, and shares outstanding ~1.95Bstockanalysis.com. Analysts forecast modest growth (e.g. revenue +2.4% in 2025 and +5.4% in 2026stockanalysis.com), so we assume FCF grows ~6% in 2025, tapering to ~3.5% by 2029. For terminal value we consider both a perpetual-growth model (g=2%) and an exit multiple (~10–12× EBITDA/FCF; AB InBev’s EV/EBITDA ≈10.9×stockanalysis.com).
FCF Projections (2025–2029): Using the above growth assumptions, projected FCF is:
YearFCF (USD)2025$12.0 B2026$12.6 B2027$13.1 B2028$13.7 B2029$14.1 B
These are estimates based on historical FCF and expected revenue/margin growthstockanalysis.com.
Discounted Cash Flow: We discount at 9.1% (CAPM). Present value of 2025–29 FCF is:
YearFCF (USD)PV factor (9.1%)PV of FCF2025$12.0 B0.917$11.0 B2026$12.6 B0.841$10.6 B2027$13.1 B0.771$10.1 B2028$13.7 B0.706$9.65 B2029$14.1 B0.648$9.16 BTotal PV$50.5 B
Sum of PV(FCF) ≈ $50.5 B.
Terminal Value:
- Perpetual-growth method: $TV_{2029} = 14.1×(1.02)/(0.091–0.02) ≈ $203.9 B. Discounted 5 years (factor ~0.648) ⇒ PV ≈ $132.1 B.
- Exit multiple: Using 12× FCF, $TV_{2029} = 14.1×12 = $169.7 B. PV (factor ~0.648) ⇒ $109.9 B.
Enterprise Value:
- Perpetual-growth case: $EV ≈ $50.5 + $132.1 = $182.6 B.
- Exit-multiple case: $EV ≈ $50.5 + $109.9 = $160.4 B.
Equity Value and Price: Subtract net debtcdn.builder.io:
- (a) Perpetual-growth: $182.6B – $60.6B = $122.0 B equity.
- (b) Exit multiple: $160.4B – $60.6B = $99.8 B equity.
Divide by 1.95B sharesstockanalysis.com: intrinsic value ≈ $62.6 (case a) or $51.2 (case b) per share. Applying a 15% margin of safety yields a target of about $53.2 (from $62.6) and $43.5 (from $51.2).
Conclusion: Our StockWatch DCF yields an intrinsic value around $62–63 per share (using the 2% perpetuity) and $51–52 (using a 12× FCF multiple). With a 15% margin, the conservative price target is roughly $53 (perpetual-growth) to $44 (exit-multiple).
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The user Ivoed has a position in ENXTBR:ABI. Simply Wall St has no position in any of the companies mentioned. Simply Wall St may provide the securities issuer or related entities with website advertising services for a fee, on an arm's length basis. These relationships have no impact on the way we conduct our business, the content we host, or how our content is served to users. The author of this narrative is not affiliated with, nor authorised by Simply Wall St as a sub-authorised representative. This narrative is general in nature and explores scenarios and estimates created by the author. The narrative does not reflect the opinions of Simply Wall St, and the views expressed are the opinion of the author alone, acting on their own behalf. These scenarios are not indicative of the company's future performance and are exploratory in the ideas they cover. The fair value estimates are estimations only, and does not constitute a recommendation to buy or sell any stock, and they do not take account of your objectives, or your financial situation. Note that the author's analysis may not factor in the latest price-sensitive company announcements or qualitative material.
