ABEV - Ambev: Not As Appealing As Its Local Alternatives

2024-06-25 12:27:16 ET

Summary

• Ambev S.A. is the largest beverage firm in Brazil with a well-established presence in the country and exposure to other Latin American nations and non-alcoholic goods.
• Ambev's prospects are unclear, with challenges in revenue growth, net income, and operating margins, making it less attractive compared to other Brazilian companies.
• The hold rating is based on Ambev's unattractive comparative valuation against other Brazilian stocks, compounded by uncertain growth prospects.

The largest beverage firm in Brazil, Ambev S.A. ( ABEV ), has about 60% of the beer market in the country, indicating a well-established presence in addition to exposure to other Latin American nations and non-alcoholic goods. Ambev's stocks have decreased by 24% year-to-date (YTD) underperforming the country's main index, iShares MSCI Brazil ETF ( EWZ ), which has fallen by approximately 18%....

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