Group 1 - Constellation Brands and PepsiCo are considered stable blue chip stocks for conservative investors, with Constellation being a major producer of alcoholic beverages and PepsiCo a leading beverage maker with strong packaged food brands [1] - Over the past two years, Constellation's stock has dropped over 40%, while PepsiCo's stock has decreased by 10%, contrasting with the S&P 500's rally of more than 40% during the same period [2] - Constellation faces significant challenges, including a decline in beer consumption among younger Americans and reduced spending from Hispanic consumers, which has negatively impacted its revenue [5][6] Group 2 - For fiscal 2026, Constellation anticipates a decline in beer sales by 2%-4%, a drop in wine and spirits sales by 17%-20%, and an overall organic sales dip of 4%-6%, with analysts projecting an 11% revenue decline and a 4% drop in adjusted EPS [7] - Analysts expect revenue to remain flat for fiscal 2027, but adjusted EPS may rise by 8% as the company restructures its weaker business segments [8] - Constellation's stock is currently priced at $140, which may appear cheap at ten times next year's earnings, and it offers a forward dividend yield of 2.9%, but a higher valuation is unlikely until the beer business stabilizes [8]

Core Insights - Constellation Brands has seen a significant decline in stock value, dropping over 40% in the past three years while the S&P 500 increased by over 70% [1] - The company faces long-term challenges including stalled growth, rising tariffs, and substantial losses [1] Revenue Breakdown - In fiscal 2025, Constellation generated 84% of its revenue from beer, 14% from wine, and 4% from spirits [3] - Beer revenue growth has decreased from 11% in FY 2023 to 5% in FY 2025, while wine and spirits segments have seen negative growth [4] Challenges Faced - The beer business has been impacted by changing consumer preferences, particularly among younger demographics, and economic pressures on Hispanic consumers [4][5] - Rising tariffs on aluminum cans and supply chain issues in Mexico have forced price increases, further slowing growth [5] - The wine and spirits segments have struggled as consumers shifted away from cheaper brands, leading to a focus on higher-end products but resulting in reduced revenues [6] Future Projections - In the first half of fiscal 2026, revenue fell 10% year over year, with expectations of further declines in beer, wine, and spirits sales [8] - Analysts predict total revenue will drop 11% in fiscal 2026 but may stabilize in fiscal 2027 and grow by 3% in fiscal 2028 [9] Profitability Outlook - Constellation turned unprofitable in fiscal 2022 and 2023 due to poor investments but is expected to return to profitability in fiscal 2026 [10][11] - Analysts forecast GAAP earnings per share (EPS) growth of 18% in fiscal 2027 and 4% in fiscal 2028, despite a projected decline in non-GAAP EPS in fiscal 2026 [11] Stock Valuation - The stock trades at 12 times forward adjusted earnings estimates with a forward dividend yield of 2.9%, indicating limited downside potential [13] - However, upside potential may be constrained until the company demonstrates a sustainable business model [13]

Group 1 - Constellation Brands, Inc. reported its second quarter fiscal 2026 financial results, with a conference call scheduled for October 7, 2025, to discuss these results and the company's outlook [1] - The company is a leading international producer and marketer of beer, wine, and spirits, with operations in the U.S., Mexico, New Zealand, and Italy [2] - Constellation Brands aims to build beloved brands and anticipates market trends to deliver value to consumers, shareholders, and employees, contributing to its status as one of the fastest-growing large CPG companies in the U.S. [2] Group 2 - The company's product portfolio includes high-end imported beers like Corona Extra and Modelo Especial, a variety of wines such as The Prisoner Wine Company and Robert Mondavi Winery, and craft spirits like Casa Noble Tequila [3] - Constellation Brands emphasizes sustainability and responsibility in its operations, integrating an ESG strategy focused on environmental stewardship, community investment, and promoting responsible alcohol consumption [4]

Core Insights - Constellation Brands, Inc. will participate in the 2025 Barclays Global Consumer Staples Conference, discussing financial metrics, operating performance, strategic initiatives, and future outlook [1] Company Overview - Constellation Brands is a leading international producer and marketer of beer, wine, and spirits, with operations in the U.S., Mexico, New Zealand, and Italy [3] - The company aims to build beloved brands and is recognized as one of the fastest-growing large consumer packaged goods (CPG) companies in the U.S. retail sector [3] Product Portfolio - The company's product offerings include high-end imported beers like Corona Extra and Modelo Especial, a variety of wines such as The Prisoner Wine Company and Robert Mondavi Winery, and craft spirits including Casa Noble Tequila and High West Whiskey [4] Sustainability and ESG Strategy - Constellation Brands emphasizes sustainable and responsible operations, integrating an Environmental, Social, and Governance (ESG) strategy into its business model [5] - The company focuses on environmental stewardship, community investment, and promoting responsible alcohol consumption as part of its long-term business strategy [5]

Core Viewpoint - Constellation Brands and Altria are both considered stable blue chip stocks, but Altria has outperformed Constellation significantly over the past three years, raising questions about future investment potential [1][2]. Constellation Brands - Constellation Brands generates most of its revenue from its beer business, with popular brands like Modelo and Corona, and a smaller portion from wine and spirits [4]. - The company faces three major challenges: declining beer consumption among younger consumers, decreasing sales of lower-end wines, and increased costs due to tariffs on imported Mexican beers [5][6]. - Analysts expect Constellation's revenue to decline from $10.2 billion in 2024 to $9.9 billion in 2027, while its earnings per share (EPS) is projected to grow at a compound annual growth rate (CAGR) of 7% [8]. - Despite a low valuation at 14 times forward earnings and a forward yield of 2.5%, the lack of near-term catalysts makes it an unappealing investment [9]. Altria - Altria primarily generates revenue from its Marlboro cigarettes and has a strong domestic focus, which protects it from tariffs and foreign-exchange issues [10][11]. - The company has been countering declining smoking rates by raising cigarette prices, cutting costs, and expanding its smokeless product portfolio through investments and acquisitions [12]. - Following a setback with its investment in Juul, Altria acquired Njoy for $2.8 billion in 2023, which is expected to boost EPS starting in 2026 [13]. - Analysts predict Altria's revenue will dip slightly from $20.4 billion in 2024 to $20.2 billion in 2027, but its EPS is expected to grow at a steady CAGR of 5% from 2025 to 2027 [14][15]. - Altria's stock is considered cheap at 12 times forward earnings, with a substantial forward yield of nearly 7%, making it a more stable investment compared to Constellation [15]. Investment Recommendation - Altria is viewed as the better investment option due to its more stable business model, larger dividend, and lower valuation multiple compared to Constellation Brands [16].

Core Insights - Constellation Brands, Inc. reported its first quarter fiscal 2026 financial results, with a conference call scheduled for July 2, 2025, to discuss these results and future outlook [1] Company Overview - Constellation Brands is a leading international producer and marketer of beer, wine, and spirits, with operations in the U.S., Mexico, New Zealand, and Italy [2] - The company's mission focuses on building beloved brands and enhancing human connections, which drives its growth as one of the fastest-growing large consumer packaged goods companies in the U.S. [2] Product Portfolio - The company offers a diverse range of products, including high-end imported beers like Corona Extra and Modelo Especial, a variety of wines such as The Prisoner Wine Company and Robert Mondavi Winery, and craft spirits like Casa Noble Tequila and High West Whiskey [3] Sustainability and ESG Strategy - Constellation Brands emphasizes sustainable and responsible operations, integrating its Environmental, Social, and Governance (ESG) strategy into its business practices [4] - The company aims to be a good steward of the environment, invest in communities, and promote responsible alcohol consumption, aligning these goals with its long-term business strategy [4]

Core Viewpoint - Constellation Brands, Inc. will report its financial results for the first quarter ending May 31, 2025, on July 1, 2025, with a conference call scheduled for July 2, 2025, to discuss the results and future outlook [1][2]. Company Overview - Constellation Brands is a leading international producer and marketer of beer, wine, and spirits, with operations in the U.S., Mexico, New Zealand, and Italy [3]. - The company's mission focuses on building beloved brands and enhancing human connections, which drives its growth as one of the fastest-growing large consumer packaged goods (CPG) companies in the U.S. [3]. Product Portfolio - The company offers a range of high-end, iconic imported beer brands, including Corona Extra, Modelo Especial, and various craft spirits and fine wine brands such as The Prisoner Wine Company and Robert Mondavi Winery [4]. Sustainability and ESG Strategy - Constellation Brands emphasizes sustainable and responsible operations, integrating its Environmental, Social, and Governance (ESG) strategy into its business practices to support long-term goals [5].

Core Viewpoint - Constellation Brands, Inc. will participate in the 2025 Deutsche Bank Global Consumer Conference, discussing financial metrics, operating performance, strategic initiatives, and future outlook [1]. Company Overview - Constellation Brands is a leading international producer and marketer of beer, wine, and spirits, with operations in the U.S., Mexico, New Zealand, and Italy [3]. - The company's mission focuses on building beloved brands and enhancing human connections, which drives its growth as one of the fastest-growing large consumer packaged goods companies in the U.S. [3]. Product Portfolio - The company offers a range of high-end imported beer brands, including Corona Extra, Modelo Especial, and various craft spirits and fine wines such as The Prisoner Wine Company and Robert Mondavi Winery [4]. Sustainability and ESG Strategy - Constellation Brands emphasizes sustainable and responsible operations, integrating its ESG strategy into its business practices to promote environmental stewardship and responsible alcohol consumption [5].

Core Viewpoint - Constellation Brands faces significant near-term challenges, leading to a nearly 30% drop in stock price over the past year, raising questions about its ability to recover in the next 12 months [1] Group 1: Challenges Faced - The company is experiencing a decline in alcohol consumption among younger millennials and Gen Z, raising concerns about the long-term viability of the alcohol market [2] - Constellation is heavily impacted by tariffs imposed by the Trump administration on Mexican imports, which could reduce its earnings per share (EPS) by $3 to $3.75 in fiscal 2026, equating to a 22% to 27% decrease from an EPS of $13.78 in fiscal 2025 [4] - Wine sales, previously thought to be more resilient, have also declined, with a 9% drop in fiscal 2024 and an additional 7% decline in fiscal 2025 [5] - The near-term outlook for the company is bleak, with expectations of flat organic sales and a projected EPS decline of 8% to 11% if tariffs remain in place [6] Group 2: Strategic Initiatives - To stabilize its business, Constellation plans to divest cheaper wine brands and focus on premium offerings, while also targeting younger consumers with nonalcoholic and lighter alcoholic beverages [7][8] - The company intends to invest approximately $2 billion in its Mexican production facilities through fiscal 2028 to enhance brewing capacity, alongside restructuring efforts aimed at achieving over $200 million in annual savings [8] Group 3: Future Projections - If the company's strategies are successful, it anticipates organic sales growth of 2% to 4% in fiscal 2027 and 2028, with EPS growth projected in the mid-single to low double digits for fiscal 2027 and low to mid-single digits for fiscal 2028 [9] - The stock is currently valued at 14 times forward earnings, with a forward yield of 2.2%, and a new $4 billion buyback plan has been authorized [10] - Should the company meet analysts' expectations and maintain its current valuation, the stock could rise about 4% to $193 per share over the next year, indicating a potential bottoming out despite near-term challenges [11] - A reduction in tariffs could lead to a quicker recovery in stock valuation, potentially resulting in gains exceeding 4% over the next 12 months [12]

Group 1 - Constellation Brands, Inc. will participate in the 2025 Goldman Sachs Global Staples Forum on May 13, 2025, with a presentation covering financial metrics, operating performance, strategic initiatives, and future outlook [1] - The presentation will be available via a live webcast on the company's investor relations website, with financial information and reconciliations of GAAP and non-GAAP measures accessible during the event [2] - Constellation Brands is a leading international producer and marketer of beer, wine, and spirits, with operations in the U.S., Mexico, New Zealand, and Italy, focusing on building beloved brands and anticipating market trends [3][4] Group 2 - The company emphasizes sustainability and responsible operations as part of its ESG strategy, aiming to be good stewards of the environment and promote responsible beverage alcohol consumption [5] - Constellation Brands offers a range of high-end beer brands, including Corona and Modelo, as well as fine wines and craft spirits, contributing to its position as one of the fastest-growing large CPG companies in the U.S. [4][3]