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Constellation Brands (STZ)
NYSE:STZ
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Constellation Brands (STZ) AI Stock Analysis

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STZ

Constellation Brands

(NYSE:STZ)

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Neutral 57 (OpenAI - 4o)
Rating:57Neutral
Price Target:
$145.00
â–²(1.57% Upside)
Constellation Brands faces significant challenges with declining revenue growth and negative free cash flow growth, impacting its financial performance. Technical indicators suggest a bearish trend, and the negative P/E ratio raises valuation concerns. Despite these challenges, strong brand loyalty and cost savings provide some positive outlook.
Positive Factors
Strong Brand Loyalty
Increased brand loyalty for key products like Corona and Modelo indicates a strong consumer base and competitive advantage, supporting long-term revenue stability.
Cost Savings Achievements
Significant cost savings enhance operational efficiency, allowing the company to reinvest in growth initiatives and improve margins over time.
Low Debt-to-Equity Ratio
A low debt-to-equity ratio suggests financial stability and flexibility, enabling the company to withstand economic fluctuations and invest in growth opportunities.
Negative Factors
Declining Revenue Growth
Declining revenue growth can hinder the company's ability to expand market share and invest in new opportunities, affecting long-term competitiveness.
Negative Free Cash Flow Growth
Negative free cash flow growth limits the company's ability to fund operations and strategic initiatives, posing risks to financial health and growth potential.
Volume Growth Challenges
Challenges in volume growth can impact revenue and market share, especially if key consumer segments are affected, limiting long-term growth prospects.

Constellation Brands (STZ) vs. SPDR S&P 500 ETF (SPY)

Constellation Brands Business Overview & Revenue Model

Company DescriptionConstellation Brands, Inc. is a leading international producer and marketer of beer, wine, and spirits. Headquartered in Victor, New York, the company operates in two main segments: Beer and Wine & Spirits. Constellation Brands is well-known for its diverse portfolio of alcoholic beverages, including popular beer brands like Modelo and Corona, as well as premium wines and spirits. The company's operational strategy focuses on innovation, premiumization, and expanding its market presence in the alcoholic beverage industry.
How the Company Makes MoneyConstellation Brands generates revenue primarily through the sale of its alcoholic beverages across various categories. The Beer segment, which constitutes a significant portion of the company's earnings, includes popular brands that are distributed across the United States and internationally. The Wine & Spirits segment also contributes to revenue through the sale of premium wines and spirits, often leveraging brand recognition and quality to command higher price points. The company benefits from strategic partnerships with distributors and retailers, which enhance its market reach and efficiency in supply chain management. Additionally, Constellation Brands invests in marketing and brand development to drive consumer demand, while also exploring opportunities in emerging markets and new product lines to diversify its revenue streams. Factors such as changing consumer preferences towards premium and craft beverages, as well as the company's focus on innovation and sustainability, further contribute to its financial performance.

Constellation Brands Key Performance Indicators (KPIs)

Any
Any
Beer Case Shipments
Beer Case Shipments
Monitors the volume of beer cases shipped, indicating market demand, distribution efficiency, and brand strength in the beer segment.
Chart InsightsBeer case shipments for Constellation Brands have shown a strong upward trend, peaking in recent quarters. Despite this, the latest earnings call reveals a more cautious outlook, with revised growth forecasts due to economic uncertainties and consumer sentiment shifts, particularly among Hispanic consumers. The company is focusing on cost savings and strategic investments to sustain growth. While shipments are robust, investors should be aware of potential headwinds from tariffs and softer demand, which could impact future performance.
Data provided by:Main Street Data

Constellation Brands Earnings Call Summary

Earnings Call Date:Oct 06, 2025
(Q2-2026)
|
% Change Since: |
Next Earnings Date:Jan 01, 2026
Earnings Call Sentiment Neutral
The earnings call presented a mixed picture. While there are notable achievements in brand loyalty, wine and spirits performance, and cost savings, there are significant challenges with volume growth, inventory rebalancing, margin pressures, and macroeconomic impacts on the beer category.
Q2-2026 Updates
Positive Updates
Increased Brand Loyalty
Constellation Brands reported increased brand loyalty for Corona and Modelo, particularly among Gen Z, who represent twice the company's share compared to the industry average.
Strong Wine and Spirits Performance
The wine and spirits segment outperformed the market for six straight months, with brands like Kim Crawford and Meiomi showing strong growth.
Cost Savings Achievements
The company achieved over $100 million in cost savings year-to-date, contributing to its transition from builder to operator, focusing on supplier and sourcing optimization.
Modelo Especial Performance
Modelo Especial remains the top-selling beer by dollar sales in the U.S., with a share two full points ahead of the next largest brand.
Negative Updates
Volume Growth Challenges
There was a reported slowdown in sales volume, particularly affecting brands and pack sizes that over-index with Hispanic consumers due to socioeconomic concerns and ICE activities.
Inventory Rebalancing Impact
The beer inventory rebalancing resulted in a negative impact on shipments and depletions, which was pulled into Q2 versus Q3.
Pressure on Margins
Headwinds include about 100 basis points of margin pressure related to fixed costs and incremental tariffs, with additional pressure from marketing investments.
Challenges in Beer Category
The overall beer category faces macroeconomic pressures, and although Constellation Brands is gaining share, the pace of share gains has slowed.
Company Guidance
During the Constellation Brands Q2 Fiscal Year 2026 earnings call, several key metrics and guidance were discussed. The company highlighted challenges with volume growth, particularly due to macroeconomic factors and consumer sentiment, noting an 80% concern rate among surveyed consumers about the socioeconomic environment. Despite these headwinds, loyalty metrics for brands like Corona and Modelo showed positive trends, with Corona's loyalty increasing among the general market and Modelo gaining loyalty within Hispanic consumers. Capital expenditures (CAPEX) for FY2026 remain unchanged, with a focus on long-term growth, while potential adjustments beyond FY2026 were noted. Beer margins faced headwinds with about 100 basis points due to fixed costs and tariffs, alongside 60 basis points from elevated marketing investments. The company continues to see cost savings, reporting $105 million year-to-date, and maintains its pricing algorithm of 1-2% for the fiscal year. The beer segment continues to lead in market share, with Modelo Especial maintaining the position as the top-selling beer by dollars in the U.S.

Constellation Brands Financial Statement Overview

Summary
Constellation Brands shows strong operational efficiency with a robust gross profit margin and cash flow generation. However, profitability is under pressure due to a negative net income, impacting ROE and increasing financial risks. The balance sheet shows moderate leverage, necessitating careful debt management.
Income Statement
65
Positive
Constellation Brands shows a strong Gross Profit Margin at 51.5% for TTM, indicating effective cost management. However, the Net Profit Margin is negative due to a net income loss of $442.3 million in TTM, reflecting challenges in profitability. The revenue growth rate shows a slight decline from the previous year, indicating stable yet stagnant revenue performance. Despite the positive EBIT and EBITDA margins, the negative net income impacts the overall performance.
Balance Sheet
70
Positive
The company's Debt-to-Equity Ratio is 1.59 for TTM, pointing to a moderate level of financial leverage. Return on Equity is negative due to the net loss, raising concerns about shareholder value creation. The Equity Ratio is 32.6%, showing a solid equity base but highlighting potential risks related to high debt levels. Overall, the balance sheet exhibits stability but is constrained by leverage and negative earnings.
Cash Flow
60
Neutral
Operating Cash Flow remains robust at $3.1 billion in TTM, and the Free Cash Flow is positive, reflecting strong cash generation capability. The Free Cash Flow to Net Income ratio is favorable due to cash flow strengths, despite the net income loss. However, the Free Cash Flow Growth Rate is moderate, influenced by steady capital expenditures. Overall, cash flow performance is strong and provides a cushion against operational challenges.
BreakdownTTMDec 2025Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue9.62B10.21B9.96B9.45B8.82B8.61B
Gross Profit4.95B5.20B4.91B4.81B4.60B4.47B
EBITDA2.56B782.60M3.08B1.17B1.00B3.22B
Net Income1.22B-81.40M1.73B-71.00M-40.40M2.00B
Balance Sheet
Total Assets21.42B21.65B25.69B24.66B25.86B27.10B
Cash, Cash Equivalents and Short-Term Investments72.00M68.10M152.40M133.50M199.40M460.60M
Total Debt10.04B12.11B12.56B12.96B10.95B10.98B
Total Liabilities13.63B14.52B15.63B15.93B13.81B13.18B
Stockholders Equity7.50B6.88B9.74B8.41B11.73B13.60B
Cash Flow
Free Cash Flow1.85B1.94B1.51B1.72B1.68B1.94B
Operating Cash Flow2.77B3.15B2.78B2.76B2.71B2.81B
Investing Cash Flow347.60M-974.80M-1.29B-999.40M-1.04B-87.90M
Financing Cash Flow-3.11B-2.26B-1.47B-1.82B-1.93B-2.35B

Constellation Brands Technical Analysis

Technical Analysis Sentiment
Neutral
Last Price142.76
Price Trends
50DMA
151.94
Negative
100DMA
161.66
Negative
200DMA
172.77
Negative
Market Momentum
MACD
-2.80
Negative
RSI
51.32
Neutral
STOCH
62.11
Neutral
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STZ, the sentiment is Neutral. The current price of 142.76 is above the 20-day moving average (MA) of 136.49, below the 50-day MA of 151.94, and below the 200-day MA of 172.77, indicating a neutral trend. The MACD of -2.80 indicates Negative momentum. The RSI at 51.32 is Neutral, neither overbought nor oversold. The STOCH value of 62.11 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for STZ.

Constellation Brands Risk Analysis

Constellation Brands disclosed 24 risk factors in its most recent earnings report. Constellation Brands reported the most risks in the "Finance & Corporate" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks

Constellation Brands Peers Comparison

Overall Rating
UnderperformOutperform
Sector (62)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
76
Outperform
$34.87B13.3015.08%2.09%-0.79%-10.83%
71
Outperform
$12.99B15.4322.65%3.26%-3.34%-14.19%
70
Outperform
$12.99B15.3322.65%3.29%-3.34%-14.19%
66
Neutral
$9.06B8.997.79%4.06%-5.48%-6.99%
62
Neutral
$20.33B14.63-3.31%3.23%1.93%-12.26%
61
Neutral
$52.42B22.1722.33%4.32%0.22%-38.76%
57
Neutral
$24.45B49.1015.91%2.84%-5.57%119.49%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
STZ
Constellation Brands
142.76
-91.75
-39.12%
BF.A
Brown Forman A
27.44
-17.65
-39.14%
DEO
Diageo
95.77
-36.40
-27.54%
TAP
Molson Coors
45.60
-7.00
-13.31%
BF.B
Brown-Forman B
27.81
-18.35
-39.75%
ABEV
Ambev SA
2.17
-0.01
-0.46%

Constellation Brands Corporate Events

Stock BuybackBusiness Operations and StrategyFinancial Disclosures
Constellation Brands Updates Fiscal 2026 Outlook Amid Challenges
Negative
Sep 2, 2025

On September 2, 2025, Constellation Brands updated its fiscal 2026 outlook, reflecting challenging macroeconomic conditions that have impacted consumer demand, particularly in its Beer Business. The company reported a revised EPS guidance and noted declines in beer net sales and operating income. Despite these challenges, Constellation Brands has maintained a strong market position, gaining volume share in most U.S. states and continuing to focus on strategic objectives such as distribution gains and brand investments. The company also highlighted its commitment to cost savings, efficiency initiatives, and capital allocation priorities, including share repurchases and maintaining its investment-grade rating.

Executive/Board ChangesShareholder Meetings
Constellation Brands Approves Equity Grants for CFO
Positive
Jul 17, 2025

On July 15, 2025, Constellation Brands‘ Board of Directors approved equity grants for CFO Garth Hankinson, recognizing his leadership in the company’s cost-savings agenda. The grants, comprising restricted stock units and performance share units, are set to vest by May 1, 2028, contingent on his continued service and certain performance metrics. Additionally, the company’s virtual Annual Meeting on the same day resulted in the election of 12 directors for a one-year term and the ratification of KPMG LLP as the independent registered public accounting firm for the fiscal year ending February 28, 2026. Stockholders also approved the compensation of the company’s named executive officers.

Stock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
Constellation Brands Announces Quarterly Cash Dividend
Positive
Jul 1, 2025

On July 1, 2025, Constellation Brands announced a quarterly cash dividend for its shareholders, reflecting its commitment to returning value to investors. Despite facing socioeconomic challenges affecting consumer demand, the company reported strong performance in its beer business, leading the U.S. market in dollar share gains. The wine and spirits segment saw a decline in sales following the divestiture of mainstream wine brands, but the company remains focused on high-margin segments. Constellation Brands also repurchased $381 million in shares and maintained its fiscal 2026 financial outlook, emphasizing strategic capital allocation and investment in brewery capacity.

M&A TransactionsBusiness Operations and Strategy
Constellation Brands Completes Wine Brands Sale to The Wine Group
Positive
Jun 2, 2025

On June 2, 2025, Constellation Brands announced the completion of its sale and exclusive licensing of certain mainstream wine brands and associated assets to The Wine Group, as part of a strategic move to focus on higher-growth, higher-margin brands. Additionally, Constellation Brands declared the full redemption of its outstanding 4.75% Senior Notes due 2025 and 5.00% Senior Notes due 2026, signaling a shift towards premiumization trends and improved performance in its wine and spirits segment.

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.Date of analysis: Oct 08, 2025