In uncertain environment, Jefferies prefers brewers among beverage makers

Jefferies cuts earnings expectations across the beverage sector, adjusting for slower growth due to trade wars, tariffs and foreign exchange effects

The broker sees a -1% impact on sales and -2.5% on EBIT for beer, saying it is more resilient given its affordability and no risk of destocking

Its top picks include Anheuser-Busch InBev ABI.BR, Heineken HEIO.AS, and Carlsberg CARLb.CO

For spirits, Jefferies sees a sales impact of -2% and EBIT of -5%, adding these are riskier investments, as valuations dropped after COVID-19

It notes, however, that spirits stocks could offer an attractive entry point if recession and tariffs risks avert, as their valuations already reflect a double dip from the pandemic and trade war

The broker sees soft drinks as a safer investment and expects the bottlers to outperform if the economy deteriorates, given their lower tariff exposure and strong business models

PT changes: