Analyst Gerald Pascarelli from Needham maintained a Buy rating on Constellation Brands and keeping the price target at $195.00.
Don’t Miss TipRanks’ Half-Year Sale
- Take advantage of TipRanks Premium at 50% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
- Make smarter investment decisions with TipRanks' Smart Investor Picks, delivered to your inbox every week.
Gerald Pascarelli has given his Buy rating due to a combination of factors influencing Constellation Brands’ current and future performance. Despite the company’s recent underperformance in revenue and earnings per share, the market had already anticipated these results, and the company’s full-year guidance remains unchanged. The expectation is that beer sales will improve as the year progresses, driven by easier comparisons and stable consumer sentiment.
Additionally, while the company faced challenges in both beer and wine & spirits segments, the beer gross margin contraction was less severe than expected, aided by significant cost savings. This allowed Constellation Brands to maintain its beer operating margin within the lower end of its annual targets. The anticipated improvement in beer sales, coupled with better weather conditions and strategic timing of events like the Fourth of July, are expected to bolster performance in the coming quarters, justifying the Buy rating.
Pascarelli covers the Consumer Defensive sector, focusing on stocks such as Celsius Holdings, Constellation Brands, and Molson Coors. According to TipRanks, Pascarelli has an average return of -0.6% and a 42.67% success rate on recommended stocks.
In another report released yesterday, Barclays also maintained a Buy rating on the stock with a $202.00 price target.