Group 1: Company Overview - Constellation Brands is the largest provider of alcoholic beverages in the US, generating 84% of its revenue from Mexican beer imports, including top-selling brands like Modelo and Corona [9][10] - The company has pruned its assets in wine and spirits categories in recent years, focusing primarily on its beer business [9][10] - Constellation holds a 26% stake in Canopy Growth, a cannabis producer in Canada, and has a joint venture with Owens-Illinois in Mexico [10] Group 2: Options Activity - Recent options activity indicates a bullish sentiment among investors, with 75% of trades being bullish and only 12% bearish [1] - The average open interest for options stands at 139.0, with a total volume of 835.00, focusing on a price range between $110.0 and $165.0 [2][3] - Noteworthy options trades include significant bullish trades with total amounts of $546.0K for puts and $162.9K for calls [8] Group 3: Analyst Ratings and Price Targets - Analysts have set an average target price of $171.4 for Constellation Brands, with individual targets ranging from $150 to $196 [12][13] - Goldman Sachs maintains a Buy rating with a target price of $196, while Barclays has lowered its rating to Equal-Weight with a target of $150 [13] - Other analysts from Jefferies and Needham also maintain Buy ratings with targets of $179 and $180, respectively [13] Group 4: Current Market Position - The current stock price of Constellation Brands (STZ) is $134.0, reflecting a 0.74% increase [15] - The next earnings report is expected in 17 days, and RSI indicators suggest that the stock may be oversold [15]

Core Viewpoint - Constellation Brands, once a stable blue chip stock, has seen its stock price drop approximately 37% this year, contrasting with a 12% rise in the S&P 500, raising questions about whether this decline presents a buying opportunity or signals further challenges ahead [1][12]. Revenue Sources - The majority of Constellation's revenue is derived from its beer business, with significant imports from Mexico, including brands like Corona and Modelo. Approximately 50% of beer sales are to Hispanic consumers, while the remaining revenue comes from smaller wine and spirits segments [3]. Major Challenges - **Declining Consumption**: Younger Millennial and Gen Z consumers are drinking less beer due to health trends, economic constraints, and changing social habits [4]. - **Economic Pressures on Consumers**: Many Hispanic consumers are cutting discretionary spending due to immigration issues and the impact of tariffs on various industries [5]. - **Tariff Impact**: The increase in tariffs on aluminum from 25% to 50% has negatively affected canned beer margins, as aluminum cans account for about 39% of beer shipments from Mexico [5]. - **Divestment Strategy**: Constellation is divesting cheaper wine and spirits brands to focus on higher-end products, which may enhance long-term gross margins but is currently hindering revenue growth [6]. Revenue Growth Trends - From fiscal 2021 to fiscal 2025, Constellation's revenue grew at a CAGR of 4%, primarily driven by its beer business, while wine and spirits segments continued to decline [8]. - Beer revenue growth rates were 8%, 11%, 11%, 9%, and 5% from FY 2021 to FY 2025, while wine and spirits experienced negative growth [9]. Guidance and Future Outlook - In September, Constellation revised its fiscal 2026 guidance, expecting organic sales to decline by 4% to 6%, with beer sales projected to drop by 2% to 4%. Comparable EPS is anticipated to decrease by 16% to 18% [10][11]. - Analysts predict a decline in revenue and comparable EPS for fiscal 2026 by 11% and 17%, respectively, but expect a slight recovery in fiscal 2027 with revenue and EPS growth of 1% and 10% [12][13]. Market Sentiment - Despite the stock appearing cheap at 12 times next year's earnings, ongoing declines in sales and profits may hinder its ability to achieve a higher valuation [12]. - The CEO indicated that the challenging macroeconomic environment has dampened consumer demand, suggesting that the downturn may persist [11].

Looking at the universe of stocks we cover at Dividend Channel , in trading on Monday, shares of Constellation Brands Inc (Symbol: STZ) were yielding above the 3% mark based on its quarterly dividend (annualized to $4.08), with the stock changing hands as low as $135.25 on the day. Dividends are particularly important for investors to consider, because historically speaking dividends have provided a considerable share of the stock market's total return. To illustrate, suppose for example you purchased share ...

Core Viewpoint - Constellation Brands has significantly lowered its fiscal year 2026 guidance, resulting in a nearly 10% decline in its stock price during September, impacting Berkshire Hathaway's $2.2 billion investment in the company [1][2]. Financial Guidance - The company's comparable earnings per share (EPS) guidance is now $11.45, reflecting a 10.2% decrease from previous estimates [3]. - Net beer sales are projected to decline by 3%, a shift from the previously expected growth of 1.5% [4]. - Beer operating income is now forecasted to fall by 8%, compared to an earlier expectation of a 1% increase [4]. - Constellation anticipates generating $1.35 billion in free cash flow, which is nearly a 13% drop from prior estimates [4]. Market Conditions - The company attributes its guidance reduction to a "challenging macroeconomic environment," particularly noting a decline in sales of high-end beers among Hispanic consumers, who represent about 50% of its U.S. sales [5]. - Despite the challenges, Constellation's outlook is now more aligned with the overall beer category, which may mitigate some concerns regarding its previous optimistic projections [6]. Market Share and Demographics - Constellation has gained the most market share among U.S. beer companies from March to mid-August, indicating strength in non-Hispanic consumer segments [7]. - The Hispanic population in the U.S. is growing significantly, with a 1.8% increase from 2022 to 2023, which is expected to provide a long-term tailwind for Constellation, given its substantial Hispanic customer base [10][11]. Investment Perspective - Constellation's forward price-to-earnings (P/E) ratio is approximately 12.5x, which is below its five-year average of 19.5x and close to its lowest level of 11.5x, suggesting it may be a compelling long-term value opportunity [13].

Core Insights - Constellation Brands (NYSE: STZ) has experienced a 15.3% decline in shares over the last 21 trading days due to a lowered fiscal 2026 sales and earnings outlook, primarily driven by decreased demand for its beers among the Hispanic population in the U.S. [2] Group 1: Company Performance - Constellation Brands is a $25 billion company generating $10 billion in revenue, with shares currently priced at $142.90 [6] - The company reported a last 12-month revenue growth of -0.5% and an operating margin of 31.7% [6] - The debt-to-equity ratio stands at 0.46, indicating a relatively low level of debt, while the cash-to-assets ratio is extremely low [6] Group 2: Historical Stock Performance - During the 2022 inflation shock, STZ's stock fell 20.1% from a high of $261.05 on December 2, 2022, to $208.68 on January 5, 2023, compared to a 25.4% decline for the S&P 500 [7] - The stock fully regained its pre-crisis peak by July 19, 2023, and reached a high of $272.80 on July 31, 2023, before currently trading at $142.90 [7] - In the 2020 COVID-19 pandemic, STZ fell 49.3% from a high of $208.34 on February 20, 2020, to $105.64 on March 23, 2020, while the S&P 500 experienced a 33.9% decline [9] - The stock fully recovered to its pre-crisis peak by December 3, 2020 [9]

Core Insights - Constellation Brands, Inc. (NYSE:STZ) is considered one of the most active stocks to buy according to Wall Street analysts, despite a recent price target reduction by Jefferies from $205 to $179 while maintaining a Buy rating [1][3] - Jefferies highlighted worsening conditions in the beer market, leading to a 10% decrease in the company's fiscal 2026 EPS estimate, although Constellation reaffirmed its fiscal 2026 projection [3] - The firm believes that an inflection in fiscal 2026 seems improbable, but acknowledges lower expectations with simpler comparisons ahead and a perceived cheap multiple of 12.5x earnings [3] Company Overview - Constellation Brands, Inc. is a leading manufacturer and marketer of beer, wine, and spirits, recognized for its premium imported beer brands such as Corona Extra, Modelo Especial, and the Modelo Cheladas line [4]

In observance of Yom Kippur the company will report second quarter financial results October 6, 2025 and host its conference call October 7, 2025, previously scheduled for October 1 and 2, respectivelyROCHESTER, N.Y., Sept. 09, 2025 (GLOBE NEWSWIRE) -- Constellation Brands, Inc. (NYSE: STZ), a leading beverage alcohol company, announced today a revised date to report its financial results for its second quarter ended August 31, 2025, of Monday, October 6, 2025 after the close of the U.S. markets by posting ...

Company Overview - Constellation Brands, Inc. (STZ) is a leading beverage alcohol company with a market cap of $25.8 billion, known for brands like Corona, Modelo, Robert Mondavi, and Svedka Vodka [1] - The company is classified as a large-cap stock, emphasizing its size and influence in the beverages - brewers industry [2] Financial Performance - STZ's revenue for Q1 2026 declined by 5.5% year-over-year to $2.5 billion, missing consensus estimates by 1.9% [5] - Adjusted EPS for the same quarter was $3.22, down 9.8% from the prior year and 3.6% below Wall Street estimates [5] Stock Performance - STZ shares have decreased 44% from their 52-week high of $261.06, reached on September 30, 2024 [3] - Over the past three months, STZ shares declined by 14.5%, underperforming the First Trust Nasdaq Food & Beverage ETF (FTXG), which saw a 1.3% loss [3] - In the last 52 weeks, STZ has fallen 41.7%, significantly lagging behind FTXG's 13.9% decline [4] - Year-to-date, STZ shares are down 33.8%, compared to FTXG's 3.6% drop [4] Market Trends - STZ has been trading below its 200-day moving average since early October 2024 and below its 50-day moving average since late May, indicating a bearish trend [4] - The company has underperformed its rival, Anheuser-Busch InBev SA/NV (BUD), which declined by 5.4% over the past 52 weeks but gained 18.7% year-to-date [6]

Core Insights - Constellation Brands and Kraft Heinz have both experienced significant stock declines over the past year, with Constellation down over 40% and Kraft Heinz down about 25%, while the S&P 500 rose nearly 20% during the same period [3][9][12] Constellation Brands - Constellation generates most of its revenue from beer, facing challenges from tariffs and declining demand among younger consumers [5][7] - The Trump administration's tariffs on aluminum have increased from 25% to 50%, impacting Constellation's margins as 39% of its beer shipments come in aluminum cans [6] - The company is attempting to adapt by launching new alcoholic beverages and divesting lower-end brands to focus on higher-end products, which may strengthen long-term margins but hinder near-term revenue growth [8] - For fiscal 2026, Constellation expects organic sales to dip 4% to 6% and comparable EPS to drop 16% to 18%, leading to a stock valuation of 12 times forward earnings [9] Kraft Heinz - Kraft Heinz owns a portfolio of well-known brands but has struggled post-merger due to a focus on cost-cutting rather than brand revitalization [10] - The company faced a $15 billion write-down in 2019 and has since recovered by divesting weaker brands and raising prices, but organic net sales dipped 2% in 2024 [11][12] - For 2025, Kraft Heinz expects organic net sales to decline by 1.5% to 3.5% and adjusted EPS to drop 13% to 18%, with the stock trading at 10 times forward earnings [12] - Kraft Heinz plans to split into two companies by the second half of 2026, but concerns remain about whether this will effectively address its challenges [13] Investment Considerations - Both companies face significant challenges that hinder their attractiveness as investments, with a preference for Constellation due to clearer long-term strategies [14][15]

Core Viewpoint - The article expresses a bearish outlook on Constellation Brands (NYSE: STZ), citing lackluster operating performance and a modest future outlook as reasons for a "sell" rating [1]. Group 1: Company Performance - Constellation Brands has shown underwhelming operating performance, which has influenced the analyst's negative rating [1]. - The future outlook for the company is described as modest, indicating limited growth potential [1]. Group 2: Investment Philosophy - The analyst emphasizes the importance of identifying undervalued stocks with a focus on balancing risk and reward [1]. - A belief is expressed that the best investment ideas are often the simplest, and that contrarian views can be beneficial [1].