It’s time to step aside Anheuser-Busch InBev as it is a «Bud Light crisis», according to HSBC.
Analyst Carlos Laboy downgraded the beverage stock, saying there are «deeper problems than ABI admits» after a recent social media partnership in April between the brand Bud Light and influencer Dylan Mulvaney. transgender, resulted in a wave of backlash that included boycotts. of the beer Meanwhile, the marketing executive responsible for the association is allegedly taking a leave of absence.
“Is ABI leadership getting the brand culture transformation right? It’s mixed,» Laboy wrote in a note Wednesday. “At Ambev, we believe the answer is ‘yes;’ in the US, we think it’s ‘no’. The way this Bud Light crisis came about a month ago, the management response and the loss of unprecedented volume and brand relevance raises a lot of questions.”
Anheuser-Busch InBev reported a rise in first-quarter profit, but the analyst cited a Beer Marketer’s Insights note that showed a sharp drop in beer sales, perhaps more than 25%, in April.
Budweiser’s parent company, which also owns the Corona and Stella Artois brands, is up more than 5.7% this year. However, it is down more than 4.8% this quarter. The shares fell 1.3% in premarket trading on Wednesday.
“Why did your US leadership underestimate the risk of a pullback given the recent experience of other companies? Is AB hiring the best people to grow brands and measure risk?” Laboy wrote. «If Budweiser and Bud Light are iconic American ideas that have united consumers for a long time, why couldn’t these marketers succeed in inviting new consumers without alienating the core base of the company’s largest brand?»
However, the analyst noted that some strength abroad is helping the stock.
Anheuser-Busch InBev did not immediately respond to CNBC’s request for comment.
—CNBC’s Michael Bloom contributed to this report.