Anheuser-Busch (BUD) Stock Slumps on Ratings Downgrade

Anheuser-Busch (BUD) stock is lower this morning after RBC Capital cut its rating on shares to 'underperform.'
By Rachel Graf ,

NEW YORK (TheStreet) -- Shares of Anheuser-Busch Inbev (BUD) - Get Report are declining 1.23% to $127.09 in late-morning trading on Wednesday after RBC Capital Markets cut its rating on the stock to "underperform" from "sector perform."

The ratings downgrade reflects the firm's concerns about the beverage giant's plans to acquire SABMiller (SBMRY).

Anheuser-Busch will likely deliver on the synergies it has outlined and more, but the benefits will be realized by SABMiller's shareholders rather than Anheuser-Busch's, RBC Capital contended.

"While we expect Anheuser-Busch InBev to do its normal awesome job in extracting synergies from SAB, we don't see significant scope for a structural increase in margins over and above that because the combination of Anheuser-Busch InBev and SAB will not materially alter ABI's volume concentration index," the firm wrote.

"We believe those 'normal' synergies are fully anticipated by investors," RBC Capital added.

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