Compania Cervecerias Unidas SA (CCU) AI Stock Analysis

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Compania Cervecerias Unidas SA

(NYSE:CCU)

75Outperform

Compania Cervecerias Unidas SA demonstrates strong financial performance with consistent growth and effective cost management. The technical indicators show upward momentum, though caution on overbought signals is advised. The company's strategic moves and partnerships, as highlighted in the earnings call, indicate resilience and future growth potential, despite some regional challenges. Valuation metrics suggest a fairly priced stock in the current market.

Compania Cervecerias Unidas SA (CCU) vs. S&P 500 (SPY)

Market Cap

$2.64B

Dividend Yield1.73%

Average Volume (3M)280.77K

Price to Earnings (P/E)15.9

Beta (1Y)0.49

Revenue Growth0.15%

EPS Growth35.56%

CountryUS

Employees9,638

SectorConsumer Defensive

Sector Strength93

IndustryBeverages - Alcoholic

Share Statistics

EPS (TTM)0.92

Shares Outstanding184,751,500

10 Day Avg. Volume295,890

30 Day Avg. Volume280,769

Financial Highlights & Ratios

PEG Ratio0.45

Price to Book (P/B)N/A

Price to Sales (P/S)1.03

Price to Cash Flow (P/CF)N/A

P/FCF Ratio0.00

Enterprise Value/Market CapN/A

Enterprise Value/RevenueN/A

Enterprise Value/Gross ProfitN/A

Enterprise Value/EbitdaN/A

Forecast

1Y Price Target

$9.40

Price Target Upside-32.33% Downside

Rating ConsensusModerate Sell

Number of Analyst Covering0

Compania Cervecerias Unidas SA Business Overview & Revenue Model

Company DescriptionCompania Cervecerias Unidas SA (CCU) is a leading beverage company based in Chile, with operations across multiple countries in Latin America. The company operates in various sectors, including beer, non-alcoholic beverages, spirits, and wine. CCU is renowned for its diverse portfolio of products, which includes well-known brands in each category, catering to a wide range of consumer preferences.

How the Company Makes MoneyCCU generates revenue through the production, distribution, and sale of its diverse range of beverages across Latin America. The company's primary revenue streams include the sale of beer, which is one of its most significant segments, followed by non-alcoholic beverages like soft drinks, bottled water, and juices. Additionally, CCU earns from the sale of spirits and wines. The company benefits from its extensive distribution network and strategic partnerships, allowing it to maintain a strong presence in both domestic and international markets. CCU's earnings are further supported by its ability to innovate and adapt to changing consumer trends, ensuring its product offerings remain competitive and attractive to customers in various regions.

Compania Cervecerias Unidas SA Financial Statement Overview

Summary

Compania Cervecerias Unidas SA exhibits robust financial health with strong revenue growth, improved profitability, and effective cash flow management. The stable balance sheet, despite its leverage, and consistent free cash flow generation position the company well for future growth in the competitive alcoholic beverages industry.

Income Statement

Very Positive

Compania Cervecerias Unidas SA has demonstrated solid growth in its revenue, with a notable increase from 2023 to 2024. The gross profit margin and net profit margin have improved, indicating better profitability and cost management. The company also shows strong EBIT and EBITDA margins, reflecting operational efficiency. However, the net income has fluctuated over the years, which may point to some volatility in profitability.

Balance Sheet

Positive

The company's balance sheet reflects a moderately leveraged position with a stable debt-to-equity ratio. The return on equity is healthy, showing effective use of equity to generate profits. However, the equity ratio indicates that a significant portion of assets is funded by liabilities, which could pose a risk if the company faces financial stress. The overall asset base has grown, which is a positive indicator of the company's expansion and investment in assets.

Cash Flow

Positive

The company's cash flow statement reveals consistent free cash flow generation, with positive growth in free cash flow from 2023 to 2024. The operating cash flow to net income ratio is strong, suggesting effective conversion of profits to cash. However, the company has experienced some fluctuations in free cash flow in earlier periods, which could indicate variability in cash generation capabilities.

Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Breakdown
Income Statement		Total Revenue
2.90T	2.57T	2.71T	2.48T	1.86T
	Gross Profit
1.31T	1.19T	1.20T	1.19T	873.56B
	EBIT
262.61B	239.97B	218.76B	330.47B	175.18B
	EBITDA
372.61B	344.05B	332.41B	454.00B	288.81B
	Net Income Common Stockholders
160.94B	105.65B	118.17B	199.16B	96.15B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
707.95B	621.47B	609.04B	279.58B	403.72B
	Total Assets
3.99T	3.42T	3.60T	2.85T	2.53T
	Total Debt
1.43T	1.33T	1.37T	573.65B	490.46B
	Net Debt
720.12B	711.11B	775.48B	308.08B	94.07B
	Total Liabilities
2.32T	2.09T	2.16T	1.42T	1.12T
	Stockholders Equity
1.53T	1.22T	1.32T	1.31T	1.30T
Cash Flow		Free Cash Flow
134.60B	164.65B	-85.44B	121.50B	157.88B
	Operating Cash Flow
287.52B	294.10B	118.17B	293.36B	280.67B
	Investing Cash Flow
-118.29B	-137.23B	-236.46B	-178.99B	-140.55B
	Financing Cash Flow
-125.04B	-118.04B	537.10B	-233.64B	64.75B

Compania Cervecerias Unidas SA Technical Analysis

Technical Analysis Sentiment

Negative

Last Price13.89

Price Trends

50DMA

13.85

Positive

100DMA

12.62

Positive

200DMA

11.84

Positive

Market Momentum

MACD

0.51

Positive

RSI

64.00

Neutral

STOCH

50.73

Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For CCU, the sentiment is Negative. The current price of 13.89 is below the 20-day moving average (MA) of 15.05, above the 50-day MA of 13.85, and above the 200-day MA of 11.84, indicating a neutral trend. The MACD of 0.51 indicates Positive momentum. The RSI at 64.00 is Neutral, neither overbought nor oversold. The STOCH value of 50.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for CCU.

Compania Cervecerias Unidas SA Risk Analysis

Compania Cervecerias Unidas SA disclosed 31 risk factors in its most recent earnings report. Compania Cervecerias Unidas SA reported the most risks in the “Macro & Political” category.

Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added 0 New Risks

Compania Cervecerias Unidas SA Peers Comparison

Overall Rating

UnderperformOutperform

Sector (62)

Financial Indicators

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CCU	75 Outperform	$2.64B	15.91	11.55%	1.73%	0.15%	35.56%
BUD	74 Outperform	$121.57B	20.84	7.31%	1.06%	0.64%	10.02%
TAP	74 Outperform	$12.39B	11.44	8.54%	2.93%	-0.64%	22.45%
DEO	70 Neutral	$57.14B	16.06	35.83%	3.94%	-1.21%	-8.89%
STZ	68 Neutral	$31.42B	46.55	7.94%	2.34%	3.69%	-55.78%
Sector *	62 Neutral	$20.19B	14.01	-16.14%	3.22%	1.15%	3.41%
SAM	61 Neutral	$2.75B	47.89	5.99%	―	0.21%	-20.69%

* Consumer Defensive Sector Average

Performance Comparison

CCU

Compania Cervecerias Unidas SA

13.89

1.82

15.08%

BUD

Anheuser-Busch Inbev Sa

58.52

-1.42

-2.37%

SAM

Boston Beer

236.13

-55.18

-18.94%

STZ

Constellation Brands

170.96

-87.23

-33.79%

DEO

Diageo

101.70

-37.43

-26.90%

TAP

Molson Coors

58.51

-6.74

-10.33%

Compania Cervecerias Unidas SA Earnings Call Summary

Earnings Call Date: Feb 25, 2025 | % Change Since: 6.19% | Next Earnings Date: May 7, 2025

Earnings Call Sentiment Positive

The earnings call reflects a positive turnaround in financial performance with significant growth in EBITDA and net income, driven by strategic initiatives and partnerships. However, challenges remain, especially in Argentina and due to currency depreciation. Overall, the company shows resilience and strategic growth.

Highlights

Strong Turnaround in Financial Results

CCU delivered higher financial results versus 2023, with consolidated EBITDA reaching CLP 387,267 million, increasing 2.1% excluding non-recurring gains, and 9.6% including them. Net income expanded 32.5% excluding non-recurring gains, and 52.3% including them.

Solid Fourth Quarter Performance

In Q4 2024, consolidated EBITDA reached CLP 182,621 million, a 65.2% increase. Consolidated net income gained CLP74,153 million, up by 77.7%.

Expansion and Strategic Partnerships

CCU strengthened its regional footprint by consolidating its water business with Danone in Argentina and increasing its scale in Paraguay through a partnership with the BRC Group.

Chilean Operating Segment Growth

Chile's top line expanded 9.9% with a 4.9% increase in average prices and 4.7% higher volumes. EBITDA expanded 23%.

Wine Segment Growth

The Wine Operating segment posted a top line expansion of 21.4%, driven by a 21.7% rise in average prices.

Positive EBITDA in Colombia

Volume in Colombia reached 2.3 million hectoliters in full year 2024, increasing 7.8%, leading to positive EBITDA.

Lowlights

Challenges in Argentina

Faced a low 20s contraction in the beer and water industries in Argentina. Despite gradual improvement, volumes are still below previous levels.

Flat Volumes in Chile

Chile experienced modest economic growth leading to flat volumes in the Chile operating segment.

Overall Cost and Expense Pressures

Experienced cost and expense pressures due to depreciation of local currencies against the U.S. dollar.

International Business Volume Decline

Excluding inorganic volumes, the International Business Operating segment saw an 11.5% contraction in organic volumes.

Company Guidance

During the CCU Fourth Quarter 2024 Earnings Conference Call, the company reported a strong financial turnaround in the latter half of the year, with consolidated EBITDA reaching CLP 387,267 million, marking a 2.1% increase excluding non-recurring gains, and a 9.6% increase when including such gains. Net income also rose significantly by 32.5% without non-recurring gains and 52.3% with them. The fourth quarter alone saw a 65.2% surge in consolidated EBITDA to CLP 182,621 million, with adjusted figures reflecting a 34.9% growth excluding hyperinflationary effects in Argentina. The Chile operating segment posted a 9.9% top-line expansion, driven by a 4.9% increase in average prices and 4.7% growth in volumes, while the International Business and Wine segments recorded increases in average prices and top-line growth. The company also expanded its regional footprint with strategic partnerships in Argentina and Paraguay and continued investments in brand preference and digital transformation. Looking forward, CCU plans to focus on profitability through revenue management and efficiencies, while navigating a volatile business environment.

Glossary

OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.

NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.

UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.