AB InBev 1Q26 Beat: Volume Recovery Confirmed, EBITDA 273bps Ahead of Consensus

Core Thesis

AB InBev’s 1Q26 results mark a decisive inflection: organic volume growth returned positive (+0.8%) for the first time in recent quarters, organic EBITDA growth of +5.3% exceeded consensus by 273bps, and underlying EPS beat by 8.8%. This is not merely a phasing effect from Easter or Chinese New Year—the quality of the beat is broad-based across regions and margin lines, validating the thesis that premiumisation and revenue management are driving durable earnings power.

What the Market May Be Underpricing

Consensus had baked in a -0.5% volume decline; actual volumes grew. This gap suggests the buyside was underestimating the pace of recovery in AB InBev’s core markets, particularly the US (STRs +0.3% despite a 350bps STW/STR gap) and Brazil (beer volumes +1.2%, outperforming Heineken’s low-single-digit decline). Two specific underpriced drivers:

• Zero-alcohol beer OSG +27%, with >20% growth in the US (Corona Cero, Mich Ultra Zero, Stella Artois 0.0). This segment carries higher margins and is still ramping distribution.
• BEES Marketplace GMV reaching $14.2bn (+15%), with 3P GMV up 55%. The B2B digital platform is becoming a material revenue and profit contributor, yet is largely absent from consensus models.

The market may also be underestimating AB InBev’s ability to defend margins while reinvesting in marketing. Despite +80bps gross margin expansion, normalised EBITDA margin contracted only 15bps—a deliberate trade-off to fuel top-line momentum.

Evidence Chain

Top-line beat was broad and deep

• 1Q26 organic sales growth: +5.8% vs consensus +3.0% (280bps beat).
• Volume growth: +0.8% vs consensus -0.5% (127bps beat). This is the key swing factor.
• Revenue per hectoliter (rev/hl) grew in every major region: US +4.4% (revenue management + brand mix), Brazil +8.6% (premiumisation), Mexico mid-single digits, Europe low-single digits.

EBITDA beat was led by South America and Middle Americas

• Organic EBITDA growth: +5.3% vs consensus +2.6% (273bps beat).
• South America EBITDA +11.3% (consensus +4.0%, 730bps beat) driven by Brazil margin expansion +70bps.
• Middle Americas EBITDA +8.1% (consensus +5.0%, 310bps beat) despite FX headwinds and increased marketing.
• EMEA EBITDA +3.9% (in line) but Europe margins flattish as Winter Olympics activation costs weighed—this is phasing.

Underlying EPS beat driven by EBIT and lower interest

• Underlying EPS $0.97 vs consensus $0.89 (+8.8%). Interest costs came in slightly below expectations.
• Adj. EBIT margin expanded 23bps y/y to 26.7%, supported by gross margin gains.

Key regional nuances

• US: STWs -3.2% but STRs +0.3%; AB InBev #1 share gainer in total alcohol; Cutwater spirits grew triple-digits. Beer category trends improved as weather normalised.
• Brazil: Beer vols +1.2% (industry LSD decline); premium/super-premium low-20s vol growth; mainstream share improved sequentially.
• China: OSG -3.9% (sequentially better from 4Q25 -3.9%? Note: volumes -1.5% vs -3.9% in 4Q25), but underperformed industry. EBITDA -11.8% due to topline weakness and CNY investment. Not a positive, but the sequential stabilisation is encouraging.
• South Korea: Vols low-teens decline, OSG high-single-digit decline due to price increase phasing—transitory.

Guidance unchanged

AB InBev reiterated FY26 EBITDA growth +4-8% (consensus +5.1%). Technical guidance: net pension interest $190-220m/qtr, tax rate 26-28%, capex $3.5-4.0bn. The reiteration at the mid-point of the range after a Q1 beat implies management sees some phasing and is not overly optimistic—but also not cutting.

Key Divergences and Risks

• US STW/STR gap: The 350bps gap between shipments and retail sales in Q1 reflects tough comps. ABI notes convergence over the full year. If retail trends soften, the gap could persist and pressure H2 shipments.
• China recovery is fragile: Volumes improved sequentially but EBITDA fell 11.8%. The market may be too optimistic on a quick China turn; investment in in-home distribution will compress margins for several quarters.
• Marketing investment ramp: EBITDA margin contraction in several regions (US, Mexico, Europe) was a deliberate choice. If these investments do not translate into sustained volume growth, margins could disappoint.
• FX headwinds: Transactional FX weighed on Brazil and Mexico. USD strength against EM currencies remains a risk to reported earnings and cash flow.
• Consensus EPS for FY27/FY28 appears elevated: Current consensus implies ~9% organic EBITDA growth in FY27 (MSe +9.2%). If volume momentum fades, that number could prove too high.

Valuation or Trading Implications

At €63.14, the stock trades at ~14.5x forward P/E (based on FY26e EPS of €4.38) against a target of €70.50 (16.5x FY26e P/E and DCF of €78.5). The Q1 beat provides tangible evidence that the mid-single-digit organic growth algorithm is achievable. The risk/reward is attractive:

• If FY26 EBITDA lands at the top end of guidance (+8%, i.e., ~€23.9bn), the stock could re-rate above 16x.
• For FY27, the divergence between MSe EBITDA growth of +9.2% and consensus of +5.5% (371bps gap) suggests upside to estimates if momentum sustains.

Immediate trading implication: The beat and guidance reiteration should drive the stock toward the €66-69 range as the market prices in a higher probability of mid-to-high-end EBITDA delivery. Key catalyst to watch: H1 US shipment convergence and China’s volume trajectory in Q2.

Appendix: Key Financial Comparison (AB InBev, US$m)