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BUD stock price: AB InBev preps for a new $27 billion move

AB Inbev (NYSE: BUD) stock has been in the spotlight this month as concerns about the company’s marketing remain. As I wrote here, the company has become disliked by both conservatives and liberals following its Dylan Mulvaney advertisements. In this article, I will explain why this controversy likely saved Anheuser-Busch.

Boycotts never work

Conservatives have called for their customers to boycott AB InBev to boycott the company’s products for going woke and caving in to ESG activists. On the other hand, liberals are disappointed in the company after it issued an apology.

As a result, some investors have been concerned about the impact of these boycotts to the company. And analysts at Evercore have identified Molson Coors as a key beneficiary to this outrage. However, history suggests that these boycotts never work.

There are many examples of this. For example, in the 2016 campaign, Donald Trump asked his followers to boycott Apple. Since then, Apple’s market cap has grown by more than $1 trillion. Similarly, Trump asked his followers to boycott Goya Foods in 2020. In the aftermath, the company’s sales jumped by 22% two weeks afterward.

Boycotts tends to have an inverse outcome because of their publicity. AB Inbev has attracted free advertisements worth more than a billion dollars. Honestly, I wouldn’t have written this article if there was no controversy in the first place. 

Further, these controversies don’t last long, especially in the era of TikTok and short-term videos. This means that people will soon lose interest in the issue. In fact, the number of AB InBev and Bud Light searches in Google has evaporated.

Dylan Mulvaney saved AB Inbev

AB Inbev stock by TradingView

Most importantly, the Dylan Mulvaney controversy has come at an important time for AB Inbev considering that the company is struggling. It is now competing with craft beer, which is gaining popularity in the United States. And as an executive recently said, the company has been losing its relevance to young people. 

Watch here:

AB Inbev is also dealing with a mountain of debt that came when it spent billions buying SAB Miller. As a result, the shares have plunged by more than 33% in the past five years. It has over $76 billion in long-term debt. 

Technicals are also bullish on BUD stock price. On the daily chart, the shares managed to move above the key resistance point at $62, the highest point on January 12. The shares are supported by all moving averages and are now approaching the key resistance at $68. 

Therefore, I suspect that the shares could jump by about 21% from the current level. This is an important level since it was the highest point in July 2021. If this happens, it means that the company’s market cap could jump by $27 billion to $157 billion.

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