Investors don’t always think about social issues impacting stock prices. But it can happen, even when a brand tries to do the right thing and support under-represented and often ostracized communities. Fortunately, the impact may not be as dramatic as you’d imagine — even in the case of successful boycotts.
Anheuser-Busch came under fire recently for launching an ad campaign and a custom Bud Light can design featuring transgender individual Dylan Mulvaney, an influencer who is celebrating one year since her transition.
Anheuser-Busch did not release the custom cans featuring Mulvaney’s face; they were designed for the campaign only and given as a gift to Mulvaney. But Anheuser-Busch’s marketing team announced that it was planning a line of Pride-themed cans.
However, not every Bud Light drinker appreciated the company’s inclusiveness. Right-wing politicians and celebrities, alike, called for a boycott of Anheuser-Busch brands, including Bud Light. Some bars stopped carrying the beer, whether to dodge controversy or avoid losing business from their clientele.
After days of radio silence on social media, CEO Brendan Whitworth tweeted that the company “never intended to be part of a discussion that divides people.” Anheuser marketing executives Alissa Heinerscheid and Daniel Blake took leaves of absence following the backlash over the campaign.
The week of the campaign, America’s best-selling beer saw sales plummet by 17%, year-over-year. But numbers show Americans weren’t drinking less beer, overall. In fact, Coors Light and Miller Lite both saw a 17.6% increase in sales in the same week. Both brands are owned by Molson Coors Beverage Company.
While Bud Light taking a stand to help a marginalized group seems to have affected sales, how has the Bud Light controversy affected its stock prices a month later? It’s hardly a blip.
A quick look at the Anheuser-Busch stock chart shows the company at its one-year high of $66.57 on April 3, 2023. By April 12, the price dropped to $63.38. However, the retail investors — just like the beer-buying public — apparently have a short memory. By May 4, stocks were back up to $65.90. In all, Anheuser-Busch is up by nearly 11% over the past six months, meaning the brouhaha and boycott had little impact on the company’s overall success or market cap.
Anheuser-Busch’s counterpart and competitor, Molson Coors Beverage Company, gained more than 22% in the past six months. Its price rose from $52.12 on April 3 to $54.27 on April 12 and continued to rise to more than $65, approaching its 52-week high, on May 2 before starting to lose ground. Certainly, the company benefited from the Bud Light boycott. But the effects may not be long-term.
For retail investors, the time to take advantage of Molson’s good fortune may have passed. Out of 13 analysts, only two recommend the stock as a strong buy, one calls it a buy now, and seven tap TAP as a “hold.” That means the stock has plenty of growing room.
However, in spite of recent stumbles, Anheuser-Busch could be the better investment over the long haul. The company’s history, its passionate fan base and its market penetration have helped the stock weather the storm. Zack’s says that Anheuser-Busch is currently undervalued and is a good pick for value investors.
Anheuser-Busch seems to have the staying power and name recognition of brands like Coca-Cola, Disney and Verizon, at a much lower price point. Investors are labeling Anheuser Busch as a “strong buy.”
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If you’re looking for a growth stock, it may take Anheuser-Busch a while to rebound, based on expert projections. However, public reaction to the company’s choices during the upcoming Pride Month could lead to another dip in sales and stock, which would be good news for those looking to increase their position or buy for the first time.
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This article originally appeared on GOBankingRates.com: How the Bud Light Can Controversy Has Affected The Company’s Stock Price