Ambev S.A. (BVMF:ABEV3; NYSE:ABEV) saw its shares decline 1.2% on Wednesday, closing at R$15.90, as market participants awaited the company's second-quarter earnings report scheduled for Thursday. Despite the daily dip, the stock posted a 1.9% gain over the past week. However, the stock remains 6.5% below its yearly high of R$17.00, reflecting ongoing concerns about the pace of recovery in Brazil's beer market.
Preliminary estimates for the second quarter place consolidated net revenue between R$20.4 billion and R$21.1 billion. Analysts project EBITDA in the range of R$6.3 billion to R$6.6 billion, with margins expected to show modest improvement. The focus, however, remains on Brazilian beer volumes, which are forecast to grow 5% to 8% year-over-year. Even at the upper end of this range, volumes would still trail those recorded in the second quarter of 2024 by 1.6%.
Volume Recovery Under Scrutiny
The subdued volume baseline has shifted investor attention to revenue per hectoliter and operating margins. Analysts from Bradesco BBI, Itaú BBA, XP Inc., and JPMorgan Chase have all published estimates for the quarter. XP projects EBITDA of approximately R$6.60 billion and an adjusted margin expansion of 0.64 percentage point. BBI forecasts a margin of 31.7%, up 1.1 points from 30.6% a year earlier. JPMorgan expects EBITDA of R$6.68 billion, while Itaú BBA's estimate is R$6.50 billion.
Bradesco BBI analysts Henrique Brustolin and Ricardo França noted that Ambev may deliver "another quarter of above-industry growth," driven by its strong portfolio and operational efficiency. BTG Pactual echoed this sentiment, suggesting that investors may be overly focused on volumes, while the real drivers of earnings surprise could be product mix, pricing, and cost control.
Analyst Sentiment Mixed
The broader analyst consensus remains cautious. According to a July summary, out of 18 analysts covering Ambev, only four recommend buying, 11 rate the stock as neutral, and three advise selling. This split aligns with target prices: BBI maintains a neutral rating with a R$15 target, Itaú BBA is also neutral with a R$17 target, and BTG Pactual assigns a buy with a R$20 target. The current share price of R$15.90 has already surpassed BBI's target.
The upcoming earnings report follows a strong first quarter, where organic revenue rose 8.1% and normalized EBITDA increased 10.1%. Beer volumes in Brazil grew 1.2% during that period, prompting a 15.3% surge in ABEV3 shares. However, the second-quarter outlook faces headwinds from sluggish consumption, cooler temperatures, and muted demand across Canada and Latin America South. Additionally, marketing expenses tied to the World Cup could limit operating leverage.
Market Context and Risks
Ambev's ADRs (NYSE:ABEV) also declined 1.12% in after-hours trading, with volume reaching 42.49 million shares. The broader Brazilian market, as measured by the Ibovespa, fell 1.52% to 173,885.34 points. The earnings report will be released before the opening of Brazilian and U.S. markets, with a webcast scheduled for 12:30 p.m. Brasília time.
Looking ahead, analysts expect that changes to full-year guidance may have a more significant impact than the quarterly volume figures alone. Ambev continues to project 2026 Brazil beer cash-cost growth between 4.5% and 7.5%. Any shift in this guidance could overshadow a volume beat or miss. Risks also include potential weakness from international operations, which could offset gains from the domestic beer segment.