Battered Beer Stock Upgraded, Gets Lofty Target

BUD hit a two-year low at the start of this month

Deputy Editor
Sep 6, 2022 at 10:45 AM
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This morning, Budweiser parent Anheuser-Busch InBev SA/NV (NYSE:BUD), otherwise known as AB InBev, received an upgrade from HSBC to "buy" from "hold." The firm sees large upside of demand in Latin America that can offset declining demand in the U.S., noting the stock could surge 30%. At last glance, BUD was up 2.2% at $48.94. 

The stock is bouncing off a Sep. 1 two-year low of $47.23, though BUD is still off 19.5% in 2022. AB InBev stock's 14-day Relative Strength Index (RSI) of 12.2 sits firmly in "oversold" territory, indicating a short-term bounce is in the cards. 

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), calls have been much more popular than usual in the last 10 weeks. This is per BUD's 50-day call/put volume ratio of 4.49, which ranks in the 90th percentile of its annual range.

BUD ranks low on the Schaeffer's Volatility Scorecard (SVS), with a score of just 26 out of 100. In other words, the security has consistently realized lower volatility than its options have priced in, making the stock a potential premium-selling candidate.

In the options pits today, BUD is seeing double its intraday average volume. The weekly 9/9 50-strike call is seeing the most activity, followed by the September 49 put, with new positions opening at the latter. 

 

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