How to Play Constellation Brands Stock After a 27% Drop in 6 Months

Core Insights - Constellation Brands, Inc. (STZ) has experienced a significant decline in its stock price, dropping 26.5% over the past six months, contrasting with a 2.5% and 2.8% increase in the industry and Consumer Staples sector, respectively [1] - The company's beer sales growth outlook has been revised downward from 7%-9% to 2%-4% for fiscal years 2027 and 2028 due to weakening demand and macroeconomic challenges [10] Stock Performance - STZ is currently trading below its 50-day and 200-day moving averages, indicating potential weakness in momentum [3] - The stock's underperformance is attributed to declining beer demand and broader macroeconomic headwinds [7] Factors Behind Stock Decline - The core beer business, traditionally a strong growth driver, is facing decelerating depletion trends, particularly for key brands like Modelo and Corona, due to cautious spending among Hispanic consumers [9] - Rising input costs, particularly from tariffs on aluminum cans, inflation, and moderated volume growth have raised concerns about margin sustainability [11] Growth Strategies - Despite current challenges, STZ's focus on premiumization is driving growth in its Wine and Spirits segment, with key brands like The Prisoner, Kim Crawford, and Meiomi [12] - The company plans to invest nearly $2 billion from fiscal 2026 to 2028 to expand its Veracruz brewery and increase capacity from 48 million hectoliters to 55 million hectoliters by fiscal 2028 [13] Earnings Estimates - The Zacks Consensus Estimate for fiscal 2026 earnings per share (EPS) has been revised down by 0.9% to $12.74, indicating a year-over-year decline of 7.6% [14]