Morgan Stanley Maintains Equal-Weight on AmBev

Morgan Stanley is out with its report today on AmBev ABV, maintaining Equal-weight. In its report, Morgan Stanley writes, "ABV's EBITDA in 2Q11 was in line with our estimate, as good pricing and tighter SG&A led to 110 bps of EBITDA margin expansion, despite weak volumes. Net income was 9% above our estimate, mainly due to a lower tax rate. Net, this is not a great quarter for ABV, but shows that management is focusing on sticking its price increases and controlling costs amid a slower volume environment than expected. We think ABV has high earnings certainty, thanks to these factors." At the time of posting, shares of ABV were trading pre-market at $28.74, up 1.05% from Wednesday's close.