Bank of America analyst Bryan Spillane has raised his price target on Anheuser-Busch (BUD) to $65, exactly the price InBev has offered. BofA has increased confidence in BUD–and, importantly, the possibility of a higher bid from InBev–following BUD’s announced restructuring plan:
BUD has rightly offered an alternative for shareholders to consider and we believe it could put pressure on InBev to sweeten its bid. A key consideration for shareholders will be weighing the certainty of an all-cash offer versus having confidence that the new plan will work. We believe BUD’s plans to reduce costs make sense. Planning aggressive price increases and holding market share steady holds some risk. While the inflation backdrop and industry structure provide cover, BUD needs to demonstrate better consistency with regards to market share.
Despite the fact the stock is currently over $62 and BofA’s price target is $65, the firm still recommends buying the stock–so apparently, BofA is not that worried about InBev pulling the plug. BofA does admit “there is downside risk still in that scenario”, although they believe it has been mitigated by the new restructuring plan.
Bank of America reiterates BUY on Anheuser-Busch (BUD), target raised from $62 to $65.
Complete BUD-InBev News and Analysis
Anheuser-Busch (BUD) Forced To Slash Costs To Show Management Not Incompetent (BUD)
Anheuser-Busch (BUD) Next Steps: InBev Threatens Hostile While Quietly Raising Bid (BUD)
Anheuser-Busch (BUD) To Reject InBev Offer: No Surprise, Just The Beginning (BUD)
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