Constellation Brands (STZ) saw its stock price rise in early trading on Friday after Berkshire Hathaway (BRK.B) revealed that it increased its stake in the alcoholic beverage company. Indeed, Berkshire bought more shares in the first quarter, raising its total holdings from 5.6 million shares to about 12 million shares, or a 6.6% stake. This move by Warren Buffett’s firm shows a strong level of confidence in the company.
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Interestingly, Constellation Brands has a portfolio that fits well with Buffett’s investment style, which focuses on companies with strong brands and steady growth. The company’s beer business, in particular, has been performing well over the last few years. With popular brands like Corona, Modelo, and Pacifico, Constellation has a strong market presence, which likely influenced Berkshire’s decision to increase its investment.
However, it is worth noting that Constellation still faces challenges, such as potential tariffs on Mexican beer imports and shifting consumer trends. Nevertheless, Citi analyst Filippo Falorni pointed out that Constellation has a strong position in the U.S. Hispanic market, along with the potential for continued success with its well-established brands and distribution networks. As a result, he described Buffett’s investment as a great example of value investing.
Is STZ Stock a Good Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on STZ stock based on 11 Buys, seven Holds, and zero Sells assigned in the past three months, as indicated by the graphic below. Furthermore, the average STZ price target of $208.11 per share implies 8% upside potential.
