Ambev initiated with a Buy at Citi

Citi initiated coverage of Ambev with a Buy rating and R$18.50 price target. The firm names Ambev its top pick in the sector. The stock is trading at a discount to historical levels, says Citi, which foresees a “benign scenario” for the company’s margins in 2024 on a favorable cost backdrop. The firm is a buyer even when conservatively incorporating a 50% reduction in the interest on own capital current benefit starting in 2025.