Why Heineken Rallied on a Bad Day for the Markets

Shares of beermaker Heineken (OTC: HEINY) had rallied 5.1% on Wednesday as of 3:20 p.m. ET, which was all the more notable since the S&P 500 index was down 3.1% at the same time.

Heineken posted first-quarter results Wednesday morning that came in better than expected, and also reiterated its prior full-year profit guidance. While management noted uncertainty from the tariff controversy, it appears the company's restatement of full-year expectations set investors at ease.

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Modest growth beats low expectation

In Q1, Heineken actually saw revenue decline 4.9% to 7.78 billion euros, but on an organic basis -- stripping out currency movements, excise taxes, and divestitures -- revenue was up 0.9%. Although overall beer volumes declined 2.1%, that was ahead of analyst expectations of a 2.9% volume decline and a 0.6% decline in organic revenue.

Looking under the hood, there were even more positive developments. Heineken managed to increase the volumes of its premium, higher-priced products by 1.8% and Heineken brand volumes by 4.6%. So, there was a positive mix-shift there that may have reassured investors about the company's premiumization strategy.

In addition, management explained that the Q1 volume decline was mainly due to a later Easter holiday in the U.S. and Europe, which pushed back volumes in those geographies to Q2, and not anything to do with demand.

Meanwhile, the company reiterated its full-year outlook for operating income growth between 4% and 8%. The reiteration of guidance in the face of much global economic uncertainty due to recent U.S. tariff moves likely reassured investors as well.

How resistant to economic turmoil is Heineken?

In addition to better-than-expected growth, Netherlands-based Heineken may also be benefiting from a reallocation to European equities and away from U.S. stocks. This phenomenon has occurred through the first part of 2025, as Trump's tariff policies and relatively higher valuations of U.S. stocks has spurred a rebalancing toward European stocks.

Overall, Heineken may be a solid place to park investment dollars amid global economic uncertainty, as the stock trades at just 15 times this year's earnings estimates, with a 3.1% dividend yield.

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Billy Duberstein and/or his clients have no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.