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You collect the following information about Anheuser-Busch and its comparable companies. (Note that the mean and median of the benchmark firms have been calculated for
You collect the following information about Anheuser-Busch and its comparable companies. (Note that the mean and median of the benchmark firms have been calculated for you).
Company Name | Trailing P/E | Expected Growth | Beta |
Anheuser-Busch | 13.57 | 7.2% | 1.1 |
Benchmark firms: | |||
Coca-Cola Bottling | 29.18 | 9.5% | 0.59 |
Molson Inc. Ltd. 'A' | 43.65 | 15.5% | 0.65 |
Corby Distilleries Ltd. | 16.24 | 7.5% | 0.7 |
Chalone Wine Group | 21.76 | 14.0% | 0.84 |
Andres Wines Ltd. 'A' | 8.96 | 3.5% | 0.87 |
Todhunter Int'l | 8.94 | 3.0% | 0.9 |
Brown-Forman 'B' | 10.07 | 11.5% | 1.05 |
Coors (Adolph) 'B' | 223.02 | 10.0% | 1.04 |
PepsiCo, Inc. | 33 | 10.5% | 1.15 |
Coca-Cola | 44.33 | 19.0% | 1.22 |
Boston Beer 'A' | 10.59 | 17.1% | 1.4 |
Whitman Corp. | 25.19 | 11.5% | 1.45 |
Mondavi (Robert) 'A' | 16.47 | 14.0% | 1.59 |
Coca-Cola Enterprises | 37.14 | 27.0% | 1.81 |
Hansen Natural Corp | 9.7 | 17.0% | 2.06 |
Benchmark Mean | 35.88 | 12.7% | 1.15 |
Benchmark Median | 21.76 | 11.5% | 1.05 |
The current market price of Anheuser-Busch stock is $54 and its most recent EPS is $3.98. Based on the information given, discuss your valuation of Anheuser-Busch. Specifically, what is your recommendation (Buy, Hold, Sell) and why?
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