CLSA Downgrades ABI Partly Due to Soft U.S. Trends

Dear Client: "With ABI trading at the high end of its five-year relative PE range, a deteriorating Brazilian economy (30% of Ebit) and ongoing weakness in its US beer trends," CLSA downgraded AB InBev from outperform to underperform, ahead of their midweek earnings. The company is facing tough comps, "lapping strong volume growth from the runup to the 2014 World Cup." As for their situation in North America, "fragmenting desires are causing consumers to trade away from mega-brands. This has