Jefferies sees margin recovery for European brewers in 2024

Royal Unibrew A/S

10/01/2024 09:34

** Jefferies expects European brewers' margin to recover in
2024, with beer volumes also seen up, as it upgrades its rating
on Belgium's AB Inbev  ABI.BR  to "buy" from "hold"
    ** "After a period of extreme volatility, beer category
prospects are under-appreciated," Jefferies says, adding it
expects 2024 to mark margin recovery for the sector 
    ** The broker expects global beer volumes to grow 1-2% this
year, with 2024 being the first "normal" year since pre-pandemic
2019
   ** Its preferred European picks are Belgium's AB Inbev
 ABI.BR , which it raises to "buy" from "hold", as well as
Netherlands-based Heineken  HEIO.AS  and Denmark's Carlsberg
 CARLb.CO , both rated "buy"
    ** ABI "leads the field in managing overhead expenses and
improving employee productivity," Jefferies says, adding co is a
leader in seven of 10 biggest future growth markets for beer 
    ** Heineken is looking at a "more benign cost picture" and
is on track to deliver 400 million euros in gross cost savings
per year from 2024 - Jefferies 
    ** Carlsberg's strategy of cutting expenses should also
allow its margins to start to grow, says Jefferies 
    ** The brokerage however cuts Royal Unibrew  RBREW.CO  to
"underperform" from "hold", citing higher costs pressures and
some acquisitions which have diluted group margins 
   
($1 = 0.9139 euros)

 (Reporting by Olivier Sorgho)
 ((Olivier.Sorgho@thomsonreuters.com))