Is Anheuser Busch Inbev NV ADR (BUD) overvalued?
On Equity Rank's model estimate, BUD trades close to its fair value (6% below it). Anheuser Busch Inbev NV ADR (BUD) last closed at $83.96; the multi-method model fair value is $89.45.
| Price | Model fair value | Price vs model |
|---|---|---|
| $83.96 | $89.45 | 6% below |
What the answer rests on
- 6 of 12 valuation methods put BUD's value above its price and 6 put it below, so the methods disagree.
- To justify today's price, BUD's free cash flow would need to grow about 0.4% a year for ten years (a reverse discounted cash flow). Over the last three years it actually grew 11.4% a year.
- BUD trades at 17.0 times its last year's earnings, against a median of 22.4 for 19 profitable Beverages companies.
- Over the past year the price sat below the model fair value on 99% of trading days. The gap ranged from 24% below to 1% above the model fair value.
Read this before relying on it
The model fair value is an estimate from published financial statements. It is not a forecast of where the price goes, and it can be wrong. Within 10% either side we call it close to fair value: valuation models are not precise enough to read more into a smaller gap. Our own lists have no proven edge over the market yet; the live record shows every result, misses included.
Every valuation method behind BUD's fair value · What prices assume · Other companies