Why liquor, beer and wine stocks could be the best trades for the rest of 2022 – 24/7 Wall St.
If there’s one item that never goes out of favor in the United States and around the world, it’s alcoholic beverages. While not everyone likes to participate, ask yourself how many close friends and relatives you know don’t take a pinch now and then. With the NFL and college football seasons fast approaching, you can bet the top companies in the business are ready for demand to rise and grow dramatically.
While COVID-19 infections have increased due to the variant despite mass inoculations, the reality is that sports venues that were virtually closed last year will be open for games this year. There may be some restrictions, like proof of vaccination or negative tests and masks, but fans appear to be back in the stands and partying before and after at tailgates and in homes across the country.
Jefferies noted in a new report that some of the major beer stocks sold off strongly, leading us to look at some of the other spirits, beer and wine stocks, and they were all hammered. Given a very rich market and the possibility of a seasonal correction over the next two months, it makes sense to consider some of the best liquor, beer and wine plays.
We found four, including three that are favored at Jefferies, that are solid ideas for growth investors looking to move away from momentum and meme games. It is important to remember that no single analyst report should be used as the sole basis for any buy or sell decision.
This company sells the most beer in the world and is a great idea for long-term growth investors. Anheuser Busch Inbev SA/NV (NYSE: BUD) is engaged in the production, distribution and sale of alcoholic beverages and non-alcoholic beverages worldwide. It offers a portfolio of around 500 beer brands, including Budweiser, Corona, Stella Artois, Beck’s, Hoegaarden, Leffe and Michelob Ultra. Other brands include Aguila, Antarctica, Bud Light, Brahma, Cass, Castle, Castle Lite, Cristal, Harbin, Jupiler, Modelo Especial, Quilmes, Victoria, Sedrin and Skol.
The stock was hit hard in July after a lackluster second-quarter earnings report. Given the strong brand strength, with Bud Light leading, this stock has rebounded from pullbacks comparable to the current one, and the risk-reward ratio at the current trading level is outstanding.
Shareholders only receive a dividend of 0.73%. Jefferies has a giant price target of $89 on the stock, and the consensus target is $78.22. Anheuser-Busch InBev’s last stock trade for Thursday was reported at $60.56 per share.
Although its name may be less well known, this company is a major player in the world of adult beverages. Brown-Forman Corp. (NYSE: BF-B) manufactures, distills, bottles, imports, exports, markets and sells various alcoholic beverages. It offers spirits, wines, whiskey-based flavored liqueurs, ready-to-drink and ready-to-pour products, ready-to-drink cocktails, vodkas, tequilas, champagnes, brandy, bourbons and liqueurs.
The company offers its products primarily under the Jack Daniel’s, Woodford Reserve, Old Forester, GlenDronach, Benriach, Glenglassaugh, Slane Irish Whiskey, Coopers’ Craft, el Jimador, Herradura, New Mix, Pepe Lopez, Antiguo, Korbel Champagne, Sonoma- Cutrer, and Finlandia brands. It is also involved in the sale of used casks, bulk whiskey and wine, as well as the provision of toll bottling services.
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