Anheuser-Busch Stock Breaches Key Trendline After Earnings

The beermaker cited weak growth in Brazil and South Korea

by Patrick Martin

Published on Oct 25, 2019 at 9:32 AM

A big earnings loser this morning is Anheuser-Busch Inbev NV (NYSE:BUD), after the beermaker's third-quarter numbers disappointed the Street. In addition, the company trimmed its profit growth forecasts, citing slower beer sales in Brazil and South Korea.

All of this has Anheuser Busch stock down 8.3% this morning at $84, in what would be its worst single-session drop in a year. Should today's results hold, the shares are on track to breach their 200-day moving average on a closing basis for the first time since late May. Year-to-date, BUD was up 38% year-to-date as of yesterday's close, but the stock's slipped since its July peak of $102.70. 

Analysts have yet to come forward with any bear notes, but that's probably because most are already skeptical, with seven out of nine in coverage rating the security a "hold" or "strong sell." There's ample room aboard the bearish bandwagon among short sellers though. Short interest has decreased by 20% in the two most recent reporting periods, and only accounts for a slim 0.3% of BUD's total available float. 

Over in the options pits, calls have held the advantage in recent weeks. This is per the stock's 10-day call/put volume ratio of 1.89 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which indicates nearly two calls have been purchased for every put on BUD during the past two weeks.

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