Constellation Brands(US:STZ) Benzinga·2026-01-06 19:16Core Viewpoint - Constellation Brands is expected to report a double-beat in revenue and earnings per share for the third quarter, indicating manageable tariff concerns [1] Earnings Estimates - Analysts predict third-quarter revenue of $2.16 billion, down from $2.46 billion in the same quarter last year [2] - Expected earnings per share for the third quarter is $2.64, a decrease from $3.25 in the previous year [2] - The company has beaten analyst estimates in seven of the last ten quarters for revenue and nine of the last ten quarters for earnings per share [2] Analyst Commentary - Needham analyst Gerald Pascarelli describes expectations for the third quarter as "pretty muted" [3] - Pascarelli maintains a Buy rating with a price target of $180, noting a projected 5% decline in depletions and a 3.5% year-over-year decline in beer shipments [4] - Overall revenue is estimated to decline by 12.2% year over year, with organic revenue expected to decrease by 3.3% [5] Management Guidance - Analysts do not anticipate significant changes in management's tone or guidance, with expectations that the company will reiterate its current outlook [6] - The Hispanic consumer market remains challenging, and there are no indications of a significant change in sentiment [6] Future Outlook - The company may provide positive commentary, with favorable forward comparables and the 2026 World Cup seen as a potential revenue catalyst [7] - Analysts believe that much of the current negative sentiment is already reflected in the stock price [7] Key Items to Watch - Wells Fargo maintains an Overweight rating and raises the price target from $155 to $160 [8] - Jefferies downgrades from Buy to Hold and lowers the price target from $170 to $154 [8] Business Performance - The beer business reported a high-single-digit decline in net sales despite beating estimates in the second quarter [9] - Constellation holds the U.S. license for importing popular brands like Modelo and Corona, which are among the top five imported beers in America [9] Tariff Impact - The company has been affected by tariffs, and analysts are looking for quantification of tariff impacts on costs for the third and fourth quarters [10] World Cup Potential - Analysts see potential benefits from the 2026 World Cup, with expectations for commentary on how the event could influence revenue and marketing strategies [11] Berkshire Hathaway Stake - Berkshire Hathaway has increased its stake in Constellation Brands, owning 13,400,000 shares by the end of the third quarter [12] - The new CEO of Berkshire, Greg Abel, is expected to closely monitor Constellation's financial results [13] Stock Performance - Constellation Brands stock is currently up 0.3% to $142.90, with a 52-week trading range of $126.45 to $226.22, and shares have declined by 35.9% over the past year [13]