Constellation Brands, the Consumer Defensive sector company, was revisited by a Wall Street analyst today. Analyst Kaumil Gajrawala from Jefferies downgraded the rating on the stock to a Hold and gave it a $154.00 price target.
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Kaumil Gajrawala has given his Hold rating due to a combination of factors affecting Constellation Brands. One of the primary concerns is the prolonged impact of immigration policies on Hispanic consumers, which is a significant demographic for the company. This has led to a decrease in consumer spending and behavioral shifts, negatively impacting the company’s top-line results.
Additionally, Constellation’s beer portfolio is facing challenges as it remains a less prioritized item in grocery baskets, particularly among Hispanic consumers. The company’s current fundamentals do not support a significant inflection, despite the low valuation. Furthermore, while there is potential for improved cash flow and shareholder returns in the future, the lack of volume growth and persistent consumer headwinds make it difficult for the shares to command a higher multiple at this time.
Gajrawala covers the Consumer Defensive sector, focusing on stocks such as Constellation Brands, Molson Coors, and Church & Dwight. According to TipRanks, Gajrawala has an average return of 0.8% and a 51.55% success rate on recommended stocks.
In another report released yesterday, Deutsche Bank also maintained a Hold rating on the stock with a $160.00 price target.