By Brazil Stock Guide – Ambev (ABEV3) is set to close the fourth quarter of 2025 with weak results, according to XP’s earnings preview, as lower volumes, rising costs and a tight Brazilian consumer weigh on performance. XP forecasts a 9.7% year-on-year drop in net revenue and a 12.9% decline in adjusted EBITDA, while earnings per share are seen falling 16.4%, widening the gap between fundamentals and valuation.
XP expects consolidated volumes to shrink 3.5% in the quarter, led by Beer Brazil, projected to fall 5% from a year earlier. The report cites adverse weather and reduced affordability as key drags on consumption. Cost pressure remains broad-based. Cash COGS per hectoliter in Beer Brazil is expected to rise at a double-digit pace, with a full-year 2025 estimate of +6%, eroding margins in an environment with limited pricing power.
Adjusted EBITDA margin is projected to contract by 126 basis points year on year. A more favorable effective tax base offers limited relief. Financial expenses are also expected to increase sequentially, even as dollar-denominated purchasing costs in Bolivia ease. The net effect is a quarter where efficiency gains fail to offset volume losses.
XP argues the near-term outlook remains strained and the long-term profile structurally challenged. The firm flags difficult weather comparisons in the first quarter of 2026 and persistent cost pressure through the end of the first half. It also sees constrained room for price and volume growth in Brazil amid intense competition and stretched household budgets. Structural trends tied to health and wellness, alongside wider adoption of GLP-1 drugs, add further headwinds to beer volumes over time.
What’s at stake
With earnings growth expected to remain modest—XP estimates a 1.4% EPS CAGR for 2026–2028—the stock’s valuation looks unappealing. Even after lifting its DCF-based target price to R$12.3 a share from R$10.9, XP maintains a sell rating, pointing to a 2026 P/E multiple of 15.2x. For investors, the key question is whether the brewer can navigate costs, climate volatility and shifting consumption habits without sacrificing margins to defend market share.
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