Constellation Brands (STZ – Research Report), the Consumer Defensive sector company, was revisited by a Wall Street analyst yesterday. Analyst Bonnie Herzog from Goldman Sachs reiterated a Buy rating on the stock and has a $225.00 price target.
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Bonnie Herzog has given her Buy rating due to a combination of factors that suggest a positive outlook for Constellation Brands. The company is expected to benefit from an improving demand environment, particularly in California, where recovery from last year’s wildfires is anticipated to drive accelerated growth. This region accounts for a significant portion of STZ’s beer business, and historical data suggests that demand in such recovery areas can be twice that of normal levels.
Additionally, Herzog notes that the company’s valuation levels are currently near trough, reflecting overly negative sentiment that may not align with actual performance. Despite weak scanner data trends, the expectation is that the company’s financial results will not deteriorate further and will likely align with previous quarters, maintaining guidance ranges for the fiscal year. Furthermore, more favorable year-over-year comparisons in shipments and depletions in the upcoming quarters, along with improving demand trends, support the view that the company’s guidance is achievable and possibly conservative.
In another report released yesterday, Evercore ISI also maintained a Buy rating on the stock with a $210.00 price target.
STZ’s price has also changed moderately for the past six months – from $226.360 to $163.300, which is a -27.86% drop .
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