Is the BUD boycott over?

Shares of Bud Light owner Anheuser-Busch InBev (NYSE: BUD) fell sharply in May after the brewing company faced extreme criticism over its April ad campaign involving transgender activist Dylan Mulvaney. 

In May, the stock collapsed more than 17%, ending the month at $53.40. Year-to-date, Anheuser’s shares remain in the red territory, down around 5%. At the time of writing, BUD shares stood at $57.26, rising around 1% at the market open on July 4. 

The stock advanced 5.68% over the past month, experiencing a volatile trading range during that period, from $54.18 to $58.95. In the past 30 days, BUD finally started to show signs of recovery, climbing more than 5%, suggesting that the boycott may be losing steam.

Last month, analysts at Deutsche Bank upgraded Anheuser’s European shares to Buy from Hold and raised its price target to €60 from €59 ($65.92 from $64.83), on expectations that current headwinds affecting the business would eventually fade. 

In addition, the company seems to be benefitting from the portfolio expansion of Beyond Beer, one of Anheuser’s brands, and its investments in B2B platforms, e-commerce, and digital marketing. 

Bud Light facing a challenging recovery journey as sales plummet 30%

Although BUD stock slightly rebounded in June, the recovery journey for Anheuser-Busch may take longer than some expect.

This is primarily because the brewer’s sales fell sharply by more than 30% in the week going into Father’s Day weekend. 

Harry Schuhmacher, publisher of Beer Business Daily, said many in the industry are surprised that the company’s sales haven’t bounced back yet. Furthermore, this trend of declining Bud Light sales is starting to look like “business as usual,” he added. 

“It’s surprised a lot of people, even their competitors, who are really struggling to keep up to supply the beer. It’s not like flipping a switch.” 

– said Schuhmacher

Since the Mulvaney scandal, Anheuser has taken several measures to address the backlash, including imposing heavy discounts on beer prices and offering large rebates. In addition, the company also took measures to help distributors, expanded its marketing budget, and even launched a new summer ad campaign. 

Moreover, a former Anheuser executive even called for the company’s CEO, Brendan Whitworth, to quit, after more than 600 employees at one of the Anheuser suppliers have been laid off. 

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