Ambev's shares rose more than 16% on Tuesday afternoon, May 5th, with investors reacting positively to the company's first-quarter results. This increase is on track to be the largest in the company's history in a single trading session, surpassing the 15.5% rise in March 2004.
Ambev reported a net profit of R$ 3.8 billion, 7% above consensus, while revenue reached R$ 22.46 billion, 8.1% higher than the same period last year. Adjusted EBITDA jumped 10.1% to R$ 7.55 billion.
But the biggest highlight came from the delivered volumes, which remained practically stable, with an increase of 0.1%, after successive declines. In the Brewery Brazil division, where Ambev had been suffering from increased competition in recent years, the volume increased by 1.2%.
“This, plus cost control, made EBITDA grow by more than 10% — and that caught the investor's eye,” says Mathias Wagner, partner and head of analysis at the asset management firm LIS Capital. “With the World Cup, which usually generates a peak in demand , the outlook for 2026 is very positive for Ambev.”
The optimism surrounding the company is also explained by its price control relative to the competition. This year, Wagner highlighted, Heineken passed on price increases for the first time before Ambev, giving the Brazilian group room to adjust its prices and gain margin for the coming quarters.
"It's a reading that suggests her competitive positioning is already more refined. This change in pricing dynamics is something that could truly lead to a game-changer," says Wagner.
Even with virtually stable volumes and inflationary pressures linked to rising oil prices, Ambev managed a slight decrease in the cost of goods sold in the quarter, from R$ 10.95 billion to R$ 10.88 billion.
“The market expected a much stronger cost increase, with everything that is happening, the inflationary shock. So, really, it was a surprise well outside of expectations,” comments Daniel Utsch, equity manager at Nero Capital.
According to Utsch, the first-quarter results are enough to trigger a wave of revisions in the market for the company's upcoming earnings reports. "This tends to generate positive flow for the stock over the next 6 to 12 months."
Although the recent numbers have generated a wave of optimism for the company, expectations were quite different even before the results , with the stock moving practically sideways for the last 10 years and suffering from negative market bets.
Before the market opened, open short selling positions represented about 7% of Ambev's free float. "So, today's appreciation has a bit of a short squeeze factor, in addition to investor excitement," says Wagner.
Ruy Hungria, an analyst at Empiricus, explains that, in addition to the competitive landscape, structural factors have been negatively impacting perceptions of the sector, such as changes in customs and even the impact of weight-loss drugs. "In this context, in recent years, the market has become somewhat more skeptical about Ambev's potential for earnings growth."
Hungary, however, maintained a neutral recommendation for the shares, considering that the company is trading at multiples it considers high, around 15 times earnings. Bank of America (BofA) also maintained a neutral recommendation for the shares, understanding that the cost scenario remains worrying until 2027.
Analysts at BTG Pactual, which has a neutral recommendation, admitted that they will likely revisit their thesis after the publication of the new earnings report, opening the door for a potential buy recommendation. The bank believes that, in this quarter, Ambev delivered the "complete package": strong pricing, improved volumes, and margin expansion, even during what should have been the most difficult period of the year in terms of costs.
“Competition has been a major obstacle until now. But, if this quarter is any indication, Ambev may be navigating this dynamic more efficiently. The portfolio strategy finally seems to be working,” says BTG in a report.
