Shares of Anheuser-Busch InBev (NYSE:BUD) have been reeling over the past few months. The stock is into oversold territory with a Relative Strength Index (RSI) of less than 30. The last time it fell to those depths was in late February when its share price was at around $58. Now, at price of close to $70, it isn't nearly as cheap as this is not even a three-month low for the popular beer maker.
Concerns of a slowing hard seltzer market may be one of the reasons investors have been hitting the sell button on Anheuser-Busch's stock, as softer sales numbers could be ahead for the company. When the business last reported its quarterly earnings on May 6, its sales grew by 12% year over year. A key factor in that was its Beyond Beer business, which included Bud Light Seltzer. That area of its operations grew by an incredible 40%. And in 2020, it produced more than $1 billion in revenue.
But strong year-over-year sales growth isn't typical for the company: In 2020, sales of $47 billion were 17% lower than the $56 billion it reported in 2017. The company's sales and profits have been falling over the years. While the company has been doing well of late, that may not be a trend that the business can keep up.
Thus far in 2021, shares of Anheuser-Busch are flat while the S&P 500 has risen by more than 16%. Even before the recent selloff, the stock was still underperforming the benchmark index. Although analysts at Argus still see the stock rising to as high as $88, it wouldn’t be surprising to see it fall further down in price given a possible slowdown in revenue.
