Carlsberg Raises Full-Year Guidance a Touch as It Delivers a Decent Q3

Carlsberg reported a fairly robust third-quarter trading update, with both volume and price/mix positive contributors to growth that was marginally better than our forecasts. Management raised guidance for the rest of the year as a result. The upside to the third-quarter volume puts our estimate squarely in the middle of management's new guidance for 10%-12% organic operating profit growth, and we make no changes to our estimates for the rest of the year. We also retain our DKK 970 fair value estimate and no-moat rating. multiple revenue growth drivers combining to beat our forecasts. Carlsberg's stock has retreated from its frothy valuation in recent months, and now appears to offer modest upside to the current market value. However, we prefer AB InBev, which we believe is a higher quality business due to its high market shares and because it has more exposure to valuation levers including any weakening of the U.S. dollar.