Companhia de Bebidas das Americas (NYSE:ABV) – Significant appreciation in preferred stock price
October 23rd, 2009 NJ Leave a comment Go to comments

Compania de Bebidas das Americas (AmBev) preferred stock has appreciated significantly since our previous company news alert dated, dated 04 September 2009, reflecting a reduction in country risk premium, upgradation of the company’s foreign currency issuer rating and broader market movement. Furthermore, we expect robust growth in Brazil beer volumes to drive full-year revenue growth over the next two years. In light of these factors and a positive outlook for Brazilian economy, although the target price does not support a HOLD, we reiterate the preferred stock a HOLD. We will reassess our target price and rating in our 3Q 09 update report. Given the current price and our anticipation of a negative currency impact on the ADR over our 6-24 months investment horizon, we downgrade the ADR from a HOLD to a SELL. We will reassess our target price and rating in our 3Q 09 update report.

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