Sabmiller Share Price (SAB)

SAB Miller: UBS revises target price from 2950p to 3300p, while leaving its neutral rating unchanged.

SAB Miller: Citigroup takes target price from 3200p to 3460p, while its buy recommendation is maintained.

SAB Miller: Credit Suisse takes price target from 3100p to 3300p and maintains an outperform rating. Exane BNP shifts target price from 3300p to 3333p keeping its outperform rating. Espirito Santo raises target price from 2570p to 2860p, while its neutral rating remains unchanged.

Positive Points: Organic group revenue growth came in at the upper end of expectations. Soft drinks volumes were 3% higher, lager volumes rose by 6% in Latin America and by 4% in Africa. Profits in Latin America, the company's largest region, rose by 15% at the half year stage, helped by selective price increases and savings from more efficient purchasing. Within the group's Asia Pacific region, volumes grew by 18% in India, with the company highlighting continued strong growth across the portfolio. In addition and importantly, the company pointed towards an improving trend in lager volumes for its Australian business, with sales for the quarter 4% below the prior year on a pro forma basis, excluding the impact of the termination of some licensed brands, compared with an 8% decline in the previous six months. The group acquired Australian brewer Foster's in December 2011. The board noted that "the integration programme in Australia remains ahead of schedule in respect of both synergy delivery and capability build." SAB Miller is the world's second biggest brewer by volume after Anheuser-Busch InBev. Around 70% of SAB Miller's sales still come from the Emerging Markets. The group's dividend policy continues to be progressive. The half year dividend was increased by 12%.

Negative Points: Organic lager volume growth came in at the lower end of analyst estimates, with trading across the group's regions mixed. For its European business, management highlighted "depressed consumer confidence". Volumes in Poland were down 2% and declined by 11% in the Czech Republic. Organic lager volumes in Asia Pacific declined by 1% (this excludes Australia volumes altogether), largely as a result of subdued volumes in China. Management pointed towards the exceptionally cold and wet winter across the country. China is the world's biggest beer market. The group's relatively recent acquisition of Australian brewer Fosters has raised concerns. The Foster's deal increased the group's exposure to mature markets. In Australia, as of the November half year results, volumes declined by 13% as Foster's lost share in a shrinking market. Financing for the deal has helped push group net debt up from $6.5 billion to over $17 billion as of the half year point. Raw material and input cost pressures remain a concern. Currency movements had an adverse impact on group revenue growth in the first half, principally due to the weakening of the South African rand and Central European currencies.

Highlights: Organic group revenue grew by 8% Lager volumes on an organic basis grew by 2% Soft drink volumes on an organic basis grew by 2%