What Does Wall Street Think About Ambev S.A. (ABEV)?

Ambev S.A. (NYSE:ABEV) is one of the best affordable stocks under $5 to buy for the next 3 years. Ambev S.A. (NYSE:ABEV) was downgraded to Market Perform from Outperform by Bernstein on November 26, who assigned a $2.88 price target to the stock.

The firm supported the rating downgrade with the company’s valuation, stating that the shares rose 16% year-to-date. While Bernstein continues to like the company’s long-term fundamentals, it told investors that it believes the current expectations to now  be “overblown”, and thus recommends that investors take profits and wait for a more attractive entry point.

Ambev S.A. (NYSE:ABEV) also received a rating update from Goldman Sachs analyst Thiago Bortoluci on November 11, who maintained a Sell rating on the stock and set a $1.95 price target.

The rating updates came after Ambev S.A. (NYSE:ABEV) released its fiscal Q3 results on October 30, with net revenue (organic) for the quarter rising 1.2% compared to last year. Management stated that top-line performance was driven by a 7.4% net revenue per hectoliter growth.

Gross margin also expanded by 10 bps to 51.5% and normalized EBITDA margin expanded by 50 bps to 33.9%, supported by cost management and effective revenue. However, high cash taxes led to cash flow from operating activities dropping by 14.7% compared to R$8.108 billion in fiscal Q3 2024.

The company also reported that normalized EBITDA also rose by 2.9%, with all its business units delivering growing or flat EBITDA. Normalized EBITDA margin expanded by 50 bps to 33.9%, attributed to effective revenue and costs management by the company.

Ambev S.A. (NYSE:ABEV) produces, distributes, and sells beverages. Its offerings include carbonated soft drinks, beer, and other non-alcoholic and non-carbonated products. The company’s operations are divided into the following geographical segments: Brazil, Central America and the Caribbean (CAC), and Canada.

While we acknowledge the potential of ABEV as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you’re looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None. This article is originally published at Insider Monkey.