Slowing demand for hard seltzer opens up an opportunity for beer giant Anheuser-Busch InBev, according to JPMorgan. Analyst Jared Dinges double-upgraded shares of the beer manufacturer to overweight from underweight, saying the stock is trading at a 23% discount to the broader sector and should benefit from improving demand for domestic light beer in the United States. “After over a decade of minimal organic volume growth, ABI’s transition to a higher-quality top line growth story,” he wrote, saying that the company is effectively working to reduce its balance sheet risks while “rapid deleveraging” over the next two years could position the company to buy back its 10% stake owned by Altria. A resurgence in demand for domestic light beer — Anheuser-Busch’s “bread and butter” — and the decline in hard seltzer demand in the U.S. should also bode well for the company going forward, Dinges said. “It’s commonly believed that Hard Seltzer sales are primarily being replaced by [ready-to-drink beverages], however, we believe a bigger benefactor from the seltzer slowdown is domestic light beer – domestic light beer has improved its share trajectory by 120bps in 2022 alone,” he wrote. Dinges also views the company’s exposure to Latin America (LatAm) as a positive for the stock in the years ahead. Demand for beer in the region correlates strongly with the global commodities cycle and should remain strong even as commodities prices remain elevated. “LatAm consumers also have experience with the current levels of inflation and are likely to be more resilient than developed market counterparts in the face of elevated pricing,” he wrote. U.S.-listed shares of the stock have contracted 6.5% this year, but could rally another 24% from Friday’s close based on the bank’s price target. Anheuser-Busch shares rose more than 4% before the bell Monday and 13% since the start of November. — CNBC’s Michael Bloom contributed reporting