AB InBev (ENXTBR:ABI) Margin Expansion Challenges Bearish Narratives on Profitability

Anheuser-Busch InBev (ENXTBR:ABI) reported forecast earnings growth of 10.03% per year and revenue growth expected at 4.7% per year, while its current net profit margin rose to 12.2% from 9.9% a year ago. Over the past five years, average earnings growth has been 24.5% per year, though last year’s gain of 20% came in slightly below that pace. With profits and margins moving higher and shares trading at a 16.5x P/E, which is below both selected peers and DCF value estimates, investors will be weighing how this performance and value proposition may influence sentiment going forward.

See our full analysis for Anheuser-Busch InBev.

Now, let’s see how the latest results line up against the most widely followed narratives for ABI. Some views could be reinforced, while others may face fresh questions.

See what the community is saying about Anheuser-Busch InBevENXTBR:ABI Earnings & Revenue History as at Oct 2025

Margin Expansion Outpaces Volume Drag

ABI’s net profit margin lifted to 12.2% this year, up from 9.9% last year, even though overall volume growth remains under pressure in key emerging markets. Analysts' consensus view highlights that margin resilience is being driven by operational efficiencies and premiumization trends, but there is some tension between these gains and weaker volume trends:

Digital transformation and cost control contributed to EBITDA margin expansion of 116 basis points in Q2. Persistent volume declines in markets like China and Brazil could limit further margin and earnings upside if demand does not recover. To see how analysts’ expectations reflect these opposing forces and what they mean for investors, read the full ABI Consensus Narrative. 📊 Read the full Anheuser-Busch InBev Consensus Narrative.

Debt Leverage: Progress Yet Constraints Remain

ABI’s net debt-to-EBITDA remains above 3x, signaling that while deleveraging continues, the company’s financial flexibility is still limited compared to historic norms for global beverage peers. Analysts' consensus view draws attention to how leverage constrains the return of capital and investment agility, even as free cash flow rises:

Improved operating margins and cash flows are helping reduce debt, but it is still high by industry standards, prompting ongoing risk through cycles of inflation or macro shocks. Heavy debt service costs may restrict options if market or commodity headwinds re-emerge, pressuring share buybacks and strategic reinvestment.

Discount to Analyst Target and DCF Fair Value

With ABI’s current share price at €51.86, it trades at a 24.5% discount to the analyst consensus target of €68.68, and even further below the DCF fair value of €141.31. Analysts' consensus view suggests that investors are pricing in both the strong growth and profitability trends as well as the persistent risks around leverage and demand softness:

The company’s price-to-earnings ratio of 16.5x is not just below peers at 22.6x, but is also below what would be required to match consensus 2028 expectations. This valuation gap presents a potential opportunity if margin and volume trends improve in line with bullish forecasts, but also signals skepticism towards full recovery or upside.

Story Continues

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Anheuser-Busch InBev on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

Notice something in the figures that stands out to you? In just a few minutes, you can share your own take and shape a unique perspective. Do it your way

A great starting point for your Anheuser-Busch InBev research is our analysis highlighting 4 key rewards and 1 important warning sign that could impact your investment decision.

See What Else Is Out There

ABI’s elevated debt and limited financial flexibility continue to create risks. This is the case even though there has been progress in margin and earnings improvement.

If you want to focus on companies with healthier balance sheets and greater resilience, uncover stronger alternatives using our solid balance sheet and fundamentals stocks screener (1984 results).

This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

Companies discussed in this article include ABI.BR.

Have feedback on this article? Concerned about the content? Get in touch with us directly. Alternatively, email [email protected]

View Comments