Ambev is preparing for a “strong” 2024, says Bank of America

Beverage maker Ambev would be preparing for a strong 2024, according to BofA (Bank of America), which recommends the purchase of shares after liquidation with repercussions on the balance sheet for the 4th quarter of 2023.

BofA points out that the guidance of the company’s costs for this year was disappointing, but EBITDA (an acronym in English for Earnings Before Interest, Taxes, Depreciation and Amortization), disregarding South Latin America, is expected to rise by 16% after growth of 20% in 2023. In addition In addition, the bank considers the valuation attractive.

The company’s first quarter should be strong, according to BofA, which shows confidence regarding beer volumes in Brazil, given a robust Carnival and easy margin comparisons.

“Additionally, our channel checks show that beer prices in Brazil rose by around 1.0% monthly in February. They are also optimistic about 2024, given the favorable macro scenario, while Ambev’s portfolio is robust and the premium is growing.”say analysts Fernando Olvera and Isabella Simonato.

Analysts estimate that the negative impact on results with Argentina should now be less relevant for revenues, “while the margin has been above expectations and cash flow generation has improved”.

Thus, BofA reinforces the purchase recommendation and maintains the target price at R$16. At 2:30 pm (Brasília time), the shares rose 2.16%, to R$12.74.

With agency information Investing Brasil.