Anheuser-Busch InBev (BUD)

Total return at 5 years: 7.9%/year = 5.9% appreciation + 2.0% dividend. The target price ($107) is ex-dividend; the $9 in dividends collected over 5 years are added separately.

By both methods, the value today (DCF $118 · Multiples $94) exceeds the market price ($80).

Today — fairly valued: at $80 trades ~14.3% below its value discounted to today (~$94); the discount is positive but does not reach the margin of safety we require (≥38%).

At 5 years — En valor: the target price ($107) plus dividends yield between the 4% floor and the 10% average return — a reasonable return, though without the margin of a great investment.

The bridge: the return at 5 years exceeds the risk-free rate (4.5%) — but the discount does not reach the required margin of safety (≥38%). To require a 15% annual return, it would need to be bought at ~$59.

Educational / informational. Does not constitute investment advice.

The inverse approach: instead of projecting growth to obtain the value, the market price ($80) is taken as given and it solves for what annual owner-earnings growth would need to hold for 5 years for the present value —at the method's rate (4.5%, no-growth terminal)— to equal that price. It is the disconfirmation test: the expectations the price already pays for, contrasted against the method's projection.

The market discounts less growth (-2.4%/year) than we project (6.0%/year) → if the base case holds, there is margin: perception is more pessimistic than the estimated reality.

That growth implies ~$7.2 bn of owner earnings in year 5 (vs ~$10.9 bn of our base case). It recalculates if the DCF assumptions are edited.

Year-by-year projection of the selected scenario. From each year, two versions of the flow are derived: growth FCF (operating flow − total capex, the cash surplus) and maintenance FCF (the owner earnings: what the business yields if it only sustains its capacity). The flow is returned almost in full (dividend + buyback) or redeployed into the operation, so that EV stays roughly flat and multiples compress because the metric grows, not because of cash accumulation. The valuation is done on Utilidad subyacente atribuible (P/E). In edit mode, revenue, margins, capex, and exit multiples can be adjusted.

Year-0 convention. The issuer files an annual report and publishes interims under a form that does not carry tagged data, so the twelve-month window is built by levels against the Jul-30-2026 report: revenue 59,320 for fiscal 2025 plus 31,927 for the first half of 2026 minus 28,632 for the first half of 2025 = 62,615 million; operating profit 15,405 + 8,691 − 7,506 = 16,590 million; underlying attributable profit 7,410 + 4,314 − 3,556 = 8,168 million. The window closes Jun-30-2026. Why the base is underlying profit rather than reported profit. Attributable profit for the first half of 2026 jumped from 3,824 to 6,314 million, 65%, and the issuer's own reconciliation shows that 2,034 million of that jump are non-recurring items net of tax, plus 35 million of hyperinflation effects. The reported window shows 9,327 million and the underlying window 8,168: the 1,159 million difference is the part that does not recur and is deliberately left out of the path. Modeling year 1 on the reported figure would have credited a financial and disposal gain in advance. Where the path comes from. The company guides earnings before interest, taxes, depreciation and amortization growing between 4% and 8% organic in fiscal 2026, with net pension and accretion financial expense of 190 to 220 million per quarter, an average gross debt coupon close to 4%, a normalized tax rate of 26% to 28% and net capital expenditure of 3,500 to 4,000 million. The base case anchors year 1 on revenue growth of 5.2%, just below the 5.7% organic figure for the first half; the adverse and favorable cases anchor at the extremes of the guided range (3.5% and 6.5% revenue). Growth is modeled organic: in the first half of 2026 revenue rose 5.7% organic against 11.5% reported, and the entire difference is currency translation, treated as a separate swing rather than baked into the base. Year 5's endpoint is 3.5%, consistent with essentially flat volume and price in line with inflation in its markets. Margin. The year-0 operating profit margin is 26.50%. The modeled expansion is modest (up to 27.75% in the base case) because the pre-depreciation profit margin has been essentially flat (35.6% in the half against 35.5% in the prior half): the profit engine is not the operating margin but declining net financial expense as leverage comes down, which is why the underlying profit margin rises faster (13.04% to 14.30%) than the operating margin. The year-0 operating cash flow margin is anchored to fiscal 2025's 25.09%, because the half-year cash flow statement is not presented with the detail needed to reconstruct the twelve-month window; the approximation is declared. Capital expenditure and depreciation. Depreciation, amortization and impairment for fiscal 2025 was 5,652 million against capital expenditure of 3,656 million: the company invests below its accounting charge, partly because that charge includes amortization of acquisition intangibles. The split follows Greenwald: with revenue growing at a mid-single-digit rate on an installed base of 205 plants, the bulk of investment is maintenance (70% is assigned) and the rest buys growth. Working capital. The window's working capital change is not presented separately in the interim report, so it is left at zero and declared: the business operates with structurally negative working capital (funded by suppliers), so an assumption of zero is the conservative choice, not an invented figure. Share path. It is a single path for all three scenarios. Year 0 is 2,017 million diluted shares, reconciled from the fiscal-2025 earnings-per-share note (attributable profit of 6,837 million over diluted earnings per share of 3.39), a figure that also reproduces the reported market value. The modeled reduction is 1.5% annually. That number is trimmed against the revealed pace for the first half of 2026 —23,999,230 shares repurchased for 1,701 million, or 1.19% of the total in six months, close to 2.4% annualized— for two verifiable reasons: that pace corresponds to the initial execution of a finite 6,000 million program approved on Oct-29-2025, of which only 1,701 million had been completed as of Jun-30-2026, and the declared capital allocation priority is reducing leverage. The weighted-average basic share count confirms a slower pace than the annualized figure: 1,989 million in the first half of 2025 against 1,976 million in the first half of 2026. Excess cash. The model does not accumulate cash: the retained excess is redeployed into debt repayment, and that benefit is already captured within the underlying profit margin path via lower financial expense. Accumulating it additionally as cash would count it twice. On fiscal-2025 owner earnings (operating cash flow 14,883 minus capital expenditure 3,656 = 11,227 million), declared uses were 4,543 of dividends and close to 2,400 of buybacks, leaving around 4,300 million retained that goes to debt. Metric and multiple. It is valued by a multiple on underlying attributable profit, never on consolidated profit: the third-party stake is material and real —1,640 million on fiscal-year profit of 8,477, or 19.3% of consolidated profit (24.0% of the amount attributable to the parent)— and corresponds to Ambev, which trades separately with a 61.73% stake, and to Budweiser APAC with 87.22%. By valuing at the equity level on the attributable figure, that stake is excluded by construction and does not need to be subtracted in the bridge. During the period the company reacquired the 49.9% minority stake in the United States metal container plants for 2,900 million, which marginally reduces that leakage going forward.

Today's elevated multiple is the price of growth: if the business grows, the entry point cheapens on its own going forward (the metric grows while EV stays roughly flat). The exit multiple at 3 years is higher than the terminal at 5 years —at 3 years there is more growth still ahead—, so the value curve shows whether value creation is concentrated in the early or the later years. The required return is applied to the base scenario.

They are valued separately, with their own rationale, and are not incorporated into the base or the verdict (they are excess return). When assigning them value — in Editmode —, the total with optionalities updates live, without moving the base.

The verdict, the base CAGR, and the margin of safety are always calculated on the base; optionalities do not alter them (with optionalities at $0 they do not move).

Each card fixes a required annual return and answers: if the business is worth $107 in 5 years, what is the maximum that can be paid today to obtain that return? Since it now trades at $80, the margin of safety is how much cheaper the market is than that maximum. The three thresholds: 4% covers inflation (the floor), 10% is the long-term average return, and 15% is the level of a great investment.

With a target price of $107 in 5 years plus $9 of dividends collected (the dividend adds to the return, not to the price) and a required return of 4.5% annually, the maximum to pay today is $94. Against the current market price ($80), the margin of safety is 14.3% (trades below the maximum → there is margin) and the total return at that price would be 7.9% annually.

• Entry multiple. Today it trades at 20× on underlying attributable profit; it compresses to 15× on year-5 profit.
• Exit multiple. 18 times, within the archetype's 16-to-22 band and below its center due to return on capital and terminal growth.
• Estimated return. +8% annually in the base case, with +6% of appreciation and +2% of dividend.
• Scenario range. The adverse case gives +8% annually and the favorable case +8%: limited downside and ample upside.

Each margin over sales, year by year: historical (solid line) → projection (dotted).

• ✕ ROIC exceeds the cost of capital (~10%)
• ✓ CFROIC backs up the ROIC (125%, cash vs. accruals)
• ✓ Healthy balance sheet (low corporate debt)
• ✓ Durable competitive moat (multiple advantages)

• Cash generation. Owner earnings of 11,227 million in fiscal 2025, with stable conversion and an operating cash flow series between 13,265 and 15,055 across four fiscal years.
• Return on capital. 7.2%, below the 10% bar; the denominator carries goodwill from twenty years of acquisitions.
• Reinvestment runway. Capital expenditure guided between 3,500 and 4,000 million annually, below the 5,652 depreciation charge: maintains the installed base more than expanding it.
• Working capital. Structurally negative, funded by suppliers, which reduces the need for the company's own working capital.

Annual levels from the official filing (10-K); the % over each bar is the year-over-year (YoY) growth vs the prior year.

The revenue driver is volume multiplied by revenue per hectoliter, and the two legs are read separately. In the first half of 2026 organic volume grew 1.1% and revenue per hectoliter 4.3%, for 5.7% organic revenue growth (reported volume for the half was +0.3%, from 279,615 to 280,412 thousand hectoliters). The difference against reported growth for the half (11.5%) is entirely currency translation and is not baked into the base: it is treated as a two-way swing. Aggregate volume across the five regions fell from 575.3 to 560.7 million hectoliters between 2024 and 2025, with Asia Pacific as the main detractor, and grew again in 2026.

The % are the annual (year-over-year) growth: each year —historical and projected— vs the prior one; the TTM (trailing 12m) vs the TTM of a year ago, to avoid overlapping windows. The historicals are exact figures from the official filings; the projected years come from the year-by-year model (the intermediate years without their own series are interpolated between the anchors). The projected columns (+1y…+5y) are 12-month windows counted from the TTM close (30-jun-2026): the projection starts from the most recently reported data, not the fiscal year. The projected base is realistic and unbiased — the risk discount is applied at the end, via the required return. The rationale for each metric is in the (i).

• Organic growth. 5.7% in the first half of 2026, with organic volume 1.1% and revenue per hectoliter 4.3%; both legs active at the same time.
• Reported growth. Essentially flat over three fiscal years (2.8%, 0.7% and −0.8%) due to currency translation, which subtracted 1,300 million in 2025.
• New categories. Non-alcoholic beer and beyond-beer beverages grow faster than the core business according to the company, within the 11% of 2025 revenue that is not beer; the available interim report does not break out the exact rate for the half.
• Terminal growth. The modeled year 5 is 3.5%, at the low end of what a consumer staple sustains, and it caps the exit multiple.

• Recurrence and predictability of consumption. Beer is a repeat-consumption category with stable demand across decades and low cyclical sensitivity compared with durable goods.
• Differentiated product versus commodity. Twenty brands above 1,000 million dollars allow charging a premium; revenue per hectoliter rose 4.3% with organic volume growing.
• Pricing power. Proven in the most recent data: price and volume rise at the same time, the only clean way to verify it.
• Market share and trend. Top volume position in more than 30 countries, but aggregate volume fell from 575.3 to 560.7 million hectoliters between 2024 and 2025.
• Recession behavior. The portfolio tilts toward mid and premium segments; the issuer itself warns that the impact of a drop in disposable income could be larger than for value competitors.

Not all debt is equal: only the structural needs refinancing; the rest is operational (self-liquidating).

Structural debt is what is exposed to the contraction phase of the cycle; operational debt (leases, matched funding) self-liquidates with the business.

• ✓Leverage (net debt / EBITDA)Net cash $0 bn
• !Interest coverage (EBIT / interest)5.2x
• –Liquidity (current ratio)no data
• ✓Cash quality (CFROIC vs ROIC)CFROIC backs 125% of ROIC
• ✕Value creation (ROIC − 10% bar)-3pp
• ✓Malinvestment test (capex vs incremental ROIC)Capex/D&A 0.6x — no over-investment
• –Float / working capitalNeutral WC
• –Dilution (SBC % of revenue + shares)no data

A traffic-light interpreted by the method (not generic): float (negative WC) adds up, capex is judged by incremental ROIC (malinvestment test), and a lender is not subjected to corporate solvency. The (i) shows the derivation of each number.

• Leverage. 73,013 million of gross debt against 11,638 of cash; the declared capital allocation priority remains reducing it.
• Debt structure. 98% of interest-bearing financial liabilities at fixed rates after hedging and an average gross coupon close to 4%, which caps near-term refinancing risk.
• Interest coverage. Interest expense of 3,194 million against operating profit of 15,405: comfortable coverage.
• Credit rating. A− with positive outlook and A3 with positive outlook; a downgrade would raise funding cost and compress capital returns.

How cash comes in and how it is deployed. In green, the business's own cash (the owner-FCF it generates and reinvests); in gray, the float and credit — customer and funding money, which is not the shareholder's.

Fiscal-2025 allocation on 10,599 million of declared uses: capital expenditure 3,656, dividends 4,543 and buybacks close to 2,400 (the 2,000 million that completed the 2024 program plus 400 from the program approved in October 2025). There were no material acquisitions in the fiscal year; those from the following period —the reacquisition of the 49.9% minority stake in the metal container plants for 2,900 million and 85% of BeatBox for 500— fall outside this window.

Who owns the shares — the alignment and whether there is a controlling shareholder.

• Horizon and stability. A reference shareholder with the right to nominate a majority of the board: provides a long horizon, at the cost of concentrating decision-making power.
• Acquisition track record. A chain of large-scale mergers integrated with no apparent operating destruction, but the price paid stayed on the balance sheet and drags down return on capital.
• Capital return. Dividend rising from 1.00 to 1.15 euros per share and a 6,000 million buyback program, subordinated to the declared priority of reducing leverage.
• Reconciliation transparency. Publishes the full reconciliation between reported and underlying profit, which allowed isolating the 2,034 million of non-recurring items for the half.

• Seller motivated by accounting: reported fiscal-2025 revenue fell 0.8% and three of the five regions declined —Asia Pacific 8.1%, South America 3.8% and North America 3.1%—, when the decline is currency-driven: translation subtracted 1,336 million and organic growth for the first half of 2026 was 5.7%.
• Missing buyers because of the balance sheet: 73,013 million of gross debt and a declared priority of reducing leverage keep the growth investor away and leave the dividend investor unsatisfied, with a dividend yield below 2%.
• Structural discount for uncovered exposure to developing markets, which subtracted 1,300 million in 2025 and which the market extrapolates forward.
• The third-party stake absorbs 19.3% of consolidated profit —24.0% of the amount attributable to the parent—, which makes multiples calculated on consolidated profit understate the actual price being paid and discourages a quick read.

The stock trades 7% below its 52-week high, so there is no collapse to explain. The post-fiscal-year-end fact that does warrant disclosure is the Jul-30-2026 interim report, for the half-year ended Jun-30-2026: organic revenue growth of 5.7%, organic volume of 1.1% and underlying attributable profit growing 21.3% (4,314 against 3,556 million), together with reported profit inflated by 2,034 million of non-recurring items in the half. The discrepancy between perception and reality lies in the gap between reported and organic growth, not in a one-off event.

The annual return (CAGR at 5 years) in each scenario, with the total period return below — the margin of safety made visual: upside range wide, downside range narrow.

Even in the bear scenario, the return holds at +2%/year (+8% total): the margin of safety protects the downside. The bull (+13%/year, +87% total) exceeds it comfortably — a favorable asymmetry, with a narrow downside range and a wide upside range.

• Currency exposure. 75% of revenue is generated in currencies other than the dollar with no translation hedge; the negative effect was 1,300 million in 2025.
• Third-party stake. 19.3% of consolidated profit (24.0% of the attributable amount) belongs to Ambev and Budweiser APAC; their distributions to the parent may be restricted by currency controls.
• Channel concentration. 365 independent wholesalers in the United States with exclusive rights whose replacement is restricted by contract and by regulation.
• Retail bargaining power. Consolidation of large chains in Europe and North America gives them bargaining power and pressures margins across the entire industry.
• Russia and Ukraine. Impairment of 1,143 million on the 50% stake in the joint venture with Anadolu Efes, with Russian operations under temporary administration by decree.

Each thinker's analytical framework applied to our data.

• Buffett / Graham Quality + margin of safety

  Fails the quality gate: ROIC 7% does not clear the 10% bar.

• Peter Lynch Growth at a reasonable price (GARP)

  A stalwart growing 6% at a PEG of 3.3 → expensive for its growth.

• Joel Greenblatt Cheap and high-return (Magic Formula)

  Earnings yield 10% (EBIT/EV) + ROIC 7% → falls outside the Magic Formula.

• Howard Marks Perception vs reality + cycle

  The price discounts -2% vs our 6%: perception is more pessimistic than reality, with an identified source of the discount.

• Seth Klarman Capital protection (bear scenario)

  Bear-scenario floor -1%/yr, bull-scenario ceiling +12%/yr over 5y → capital protected, asymmetry in your favor.

• Pat Dorsey Moat strength (Five Rules)

  A wide moat, stable; sources: intangibles, efficient scale, cost advantage, switching costs → passes the Five Rules.

• Aswath Damodaran Expectations implied by the price

  Justifying the price requires discounting -2%, within what we project (6%) — the story squares with the numbers.