- We lower our target price (TP) by 13% but upgrade our rating to BUY from OUTPERFORM as the share price has declined by 21% over the past 3 months.

- We expect for earnings to recover in 2024 from modest volume growth and the easing of input costs. We view current valuations as attractive on 19.5x TTM PE vs its 5-year average of 27.8x. Our TP puts SAB’s 2023F/24F P/E at 24/23x vs a 5-year average peer median TTM P/E of 34x.

- Our lower TP is due to (1) our 14% lower 2024F NPAT-MI forecast and (2) 3% lower P/E target following lower the 5-year average of the peer median vs our last report, which is partly offset by the positive effect of rolling our TP horizon to end-2024. Our lower 2024F NPAT-MI projection is mainly because we decrease 2024F net revenue by 10% as we expect a slower demand in recovery. Furthermore, we expect a 40-bps higher beer gross profit margin thanks to decreased input costs that will partly offset high SG&A expenses in 2024F. 

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