Ambev "Better 1Q, Worse Risk/Reward; Maintain Sell" (Sell) Alcantara

Research evidence excerpt

Ambev "Better 1Q, Worse Risk/Reward; Maintain Sell" (Sell) Alcantara

Global Research

13 May 2026ab

Ambev Equities

BrazilBetter 1Q, Worse Risk/Reward; Maintain Sell

Distillers & Brewers

12-month rating Sell

The Key Pillars Behind Our Long-Term Bear Case Remain Intact

Ambev’s 1Q26 print came ahead of both our and consensus expectations. Yet, we 12m price target R$15.50

believe the main pillars behind our cautious view on the stock remain in place, Prior : R$14.50

leading us to raise our 2027–28 EPS estimates only modestly by +3.8% on average

Price (13 May 2026) R$15.89

(vs. a +5.3% EPS beat in 1Q26). First, while we acknowledge the company’s strong

execution in premium beer and beyond beer, the core and value portfolio — still RIC: ABEV3.SA BBG: ABEV3 BZ

roughly 80% of volumes — remains weak. Second, while COGS and OPEX

Trading data and key metrics

management surprised positively in 1Q26, royalty expenses continued to rise

52-wk range R$16.95-11.71

(−20bps margin impact) and, more importantly for the medium-term story, the

commodities backdrop for 2027 remains challenging. Third, we still see no Market cap. R$248b/US$49.5b

indication that capital distributions will accelerate materially in 2026. Against this Shares o/s 15,610m (ORD)

backdrop, and with the stock trading at 16x 2026 P/E (+20% premium to its 5-year Free float 29%

average), we continue to view Ambev’s valuation as demanding given Brazil’s high Avg. daily volume ('000) 27,564

cost of capital. We therefore keep our Sell rating on Ambev and instead prefer ABI. Avg. daily value (m) R$428.8

Common s/h equity (12/26E) R$85.0b

2Q Should Be Not Just Good, but Great to Justify Ambev’s Valuation P/BV (12/26E) 3.0x

Unlike 1Q26 — where Brazil beer volume expectations had been revised down Net debt to EBITDA (12/26E) NM