The new year isn’t starting off well for beer maker Anheuser-Busch InBev (NYSE:BUD). The stock has been falling in the first few days of 2025 after it already had an abysmal performance in the previous year, declining by 23%.
Anheuser-Busch has struggled with generating much growth in recent quarters. Its brand has been damaged over boycotts relating to its marketing and promotional strategies involving influencer Dylan Mulvaney, and it hasn’t really recovered. And now amid rising concerns about the health risks related to drinking beer, investors appear to be even more concerned about the company’s growth opportunities.
The stock has been in a free fall in recent weeks, fairly consistently being in oversold range, with a Relative Strength Index (RSI) of well under 30. Last week, its RSI was around 21.
From a valuation perspective, Anheuser-Busch might seem like a tempting buy as it trades at 13 times next year’s estimated profits and at just 1.3 times its book value. But with big question marks surrounding its brands and its overall competitiveness, investors haven’t been seeing the stock as a deal but instead as a value trap.
This hasn’t been a good stock to own in recent years and without some stronger, more promising growth prospects, investors may want to wait this one out as Anheuser-Busch’s stock price could still go lower given its underwhelming results. Until the company can prove that its brand has recovered and is growing again, investors are simply better off taking a wait-and-see approach with this struggling stock.
