Constellation Brands (STZ) AI Stock Analysis

• Market Cap: $23.49B
• Dividend Yield: 3.03%
• Average Volume (3M): 2.95M
• Price to Earnings (P/E): 19.6
• Beta (1Y): 0.46
• Revenue Growth: -5.57%
• EPS Growth: 119.49%
• Country: US
• Employees: 10,600
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Beverages - Wineries & Distilleries
• EPS (TTM): 3.63
• Shares Outstanding: 175,013,340
• 10 Day Avg. Volume: 2,145,201
• 30 Day Avg. Volume: 2,945,550
• PEG Ratio: 3.73
• Price to Book (P/B): 4.63
• Price to Sales (P/S): 3.12
• P/FCF Ratio: 16.43
• Enterprise Value/Market Cap: 1.67
• Enterprise Value/Revenue: 4.08
• Enterprise Value/Gross Profit: 7.93
• Enterprise Value/Ebitda: 15.36
• 1Y Price Target: $168.79
• Price Target Upside: 25.78% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 20

• Rating: 57 Neutral
• Price Target: $145.00 ▲(8.06% 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 Business Overview & Revenue Model

Company Description

Constellation 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 Money

Constellation 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 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

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

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

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.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	9.62B	10.21B	9.96B	9.45B	8.82B	8.61B
Gross Profit	4.95B	5.20B	4.91B	4.81B	4.60B	4.47B
EBITDA	2.56B	782.60M	3.08B	1.17B	1.00B	3.22B
Net Income	1.22B	-81.40M	1.73B	-71.00M	-40.40M	2.00B
Balance Sheet
Total Assets	21.42B	21.65B	25.69B	24.66B	25.86B	27.10B
Cash, Cash Equivalents and Short-Term Investments	72.00M	68.10M	152.40M	133.50M	199.40M	460.60M
Total Debt	10.04B	12.11B	12.56B	12.96B	10.95B	10.98B
Total Liabilities	13.63B	14.52B	15.63B	15.93B	13.81B	13.18B
Stockholders Equity	7.50B	6.88B	9.74B	8.41B	11.73B	13.60B
Cash Flow
Free Cash Flow	1.85B	1.94B	1.51B	1.72B	1.68B	1.94B
Operating Cash Flow	2.77B	3.15B	2.78B	2.76B	2.71B	2.81B
Investing Cash Flow	347.60M	-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: Negative
• Last Price: 134.19
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STZ, the sentiment is Negative. The current price of 134.19 is below the 20-day moving average (MA) of 140.17, below the 50-day MA of 143.70, and below the 200-day MA of 167.43, indicating a bearish trend. The MACD of -1.32 indicates Positive momentum. The RSI at 33.94 is Neutral, neither overbought nor oversold. The STOCH value of 17.92 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STZ.

Constellation Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABEV	―	$35.37B	13.48	15.08%	2.05%	-0.79%	-10.83%
BF.A	―	$13.31B	15.71	22.65%	3.23%	-3.34%	-14.19%
BF.B	―	$13.15B	15.66	22.65%	3.21%	-3.34%	-14.19%
TAP	―	$9.00B	8.95	7.79%	4.09%	-5.48%	-6.99%
Sector *	―	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
DEO	―	$52.43B	22.09	22.33%	4.40%	0.22%	-38.76%
STZ	―	$23.49B	19.59	15.91%	3.03%	-5.57%	119.49%

Constellation Brands Corporate Events

Constellation Brands Updates Fiscal 2026 Outlook Amid Challenges

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.

Constellation Brands Approves Equity Grants for CFO

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.

Constellation Brands Announces Quarterly Cash Dividend

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.

Constellation Brands Completes Wine Brands Sale to The Wine Group

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.