Ambev: Lack of Growth Keeps Us Underweight ABEV

Research evidence excerpt

M

Idea

August 5, 2026 04:01 AM GMT

Morgan Stanley C.T.V.M. S.A.+

Ambev | Latin America

Ricardo L Alves

Equity Analyst

Lack of Growth Keeps Us

Underweight ABEV

Lucas T Mussi

Research Associate

Henrique Morello

Research Associate

What’s Changed

Ambev SA (ABEV3.SA)

From

To

Price Target

R$12.50

R$13.00

We remain cautious beer growth prospects in LatAm on

structural (eg: health, demographics, per caps) & cyclical (eg:

soft consumer in Bz, costs) headwinds. We now model 0% total

volumes CAGR through 2027, translating into ~2% EPS growth

in the same period (~5% below consensus). Stay UW at ~15x PE.

Beer secular challenges, high multiples, limited EPS growth & downside to

consensus; stay UW. After a weaker-than-expected 2Q and as we update our ABEV3

model, we remain Underweight the stock as we see decelerating Brazil in the NTM

and slow EPS expansion through 2027e. We cut our 2026/27 EBITDA by ~2% as we

now assume even lower top-line at ABEV's core, but the biggest adjustment came in

LAS (EBITDA down ~9% vs. prior) on the back of our more guarded stance in Bolivia

Ambev SA (ABEV3.SA, ABEV3 BZ)

ADRABEV.N

LatAm Food & Beverage | Brazil

Stock Rating

Industry View

Price target

Shr price, close (Aug 4, 2026)

Mkt cap, curr (mm)

52-Week Range

Fiscal Year Ending

EPS (R$)**

Prior EPS (R$)**

P/E

EPS (R$)§

Div yld (%)

Underweight

No Rating

R$13.00

R$15.87

R$249,095

R$16.99-11.04

12/25 12/26e 12/27e 12/28e

0.99

14.0

0.96

9.5

1.03

1.01

15.5

1.02

5.5

1.03

1.01

15.3

1.09

5.7

1.09

1.06

14.5

1.18

5.7

Unless otherwise noted, all metrics are based on Morgan Stanley ModelWare

framework

** = Based on consensus methodology

§ = Consensus data is provided by Refinitiv Estimates

e = Morgan Stanley Research estimates

(see more details in our key assumptions in the next paragraphs). As we approach

the back half of the year, we also think ABEV-watchers should start thinking about

eventual cost pressures in 2027 (MSe cash COGS up ~9% y-y vs. consensus ~5%),

which could further impair EPS generation potential: we currently model 1.5% EPS

2-year CAGR into 2027; At 15.3x 2027e PE, valuation looks demanding to us

considering our structural concerns for beer, an industry that has been pretty

…