Stock of the Day

January 9, 2023

Constellation Brands (STZ)

$176.00
+$3.67 (+2.1%)
Market Cap: $31.15B

About Constellation Brands

Constellation Brands, Inc., together with its subsidiaries, produces, imports, markets, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. The company provides beer primarily under the Corona Extra, Corona Familiar, Corona Hard Seltzer, Corona Light, Corona Non-Alcoholic, Corona Premier, Corona Refresca, Modelo Especial, Modelo Chelada, Modelo Negra, Modelo Oro, Victoria, Vicky Chamoy, and Pacifico brands. It also offers wine under the Cook's California Champagne, Kim Crawford, Meiomi, Mount Veeder, Ruffino, SIMI, My Favorite Neighbor, Robert Mondavi Winery, Schrader, and The Prisoner Wine Company brands; and spirits under the Casa Noble, Copper & Kings, High West, Mi CAMPO, Nelson's Green Brier, and SVEDKA brands. The company provides its products to wholesale distributors, retailers, on-premise locations, and state alcohol beverage control agencies. Constellation Brands, Inc. was founded in 1945 and is headquartered in Victor, New York.

Constellation Brands Bull Case

Here are some ways that investors could benefit from investing in Constellation Brands, Inc.:

  • Constellation Brands, Inc. has a consensus target price of $254.29, indicating potential upside from the current stock price of approximately $200.00, which could attract investors looking for growth opportunities.
  • The company reported a return on equity of 26.55%, showcasing its ability to generate profits from shareholders' equity, which is a positive indicator of financial health and efficiency.
  • Despite a slight decline in quarterly revenue, the company continues to maintain a net margin of 6.27%, suggesting that it is still able to retain a portion of its revenue as profit, which is crucial for sustaining dividends and reinvestment.
  • Constellation Brands, Inc. has a strong presence in the beverage industry, producing and marketing popular products across beer, wine, and spirits, which positions it well in a diverse market.
  • The recent increase in the dividend payout to $1.01 per share, with an annualized yield of 2.34%, reflects the company's commitment to returning value to shareholders, making it attractive for income-focused investors.

Constellation Brands Bear Case

Investors should be bearish about investing in Constellation Brands, Inc. for these reasons:

  • The company missed earnings expectations by $0.08, reporting $3.25 EPS against a consensus estimate of $3.33, which may raise concerns about its short-term profitability and operational efficiency.
  • Revenue for the latest quarter was down 0.3% compared to the same period last year, indicating potential challenges in maintaining sales growth in a competitive market.
  • Analysts have recently downgraded their ratings and price targets for the stock, with several firms reducing their target prices significantly, which could signal a lack of confidence in the company's near-term performance.
  • The payout ratio of 108.60% suggests that the company is paying out more in dividends than it is earning, which could be unsustainable in the long run and may lead to future cuts in dividend payments.
  • With ten analysts rating the stock as a hold and only twelve as a buy, the overall sentiment may indicate a cautious outlook among market experts, which could deter new investors.

Recent News