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Constellation Brands (STZ)
NYSE:STZ

Constellation Brands (STZ) AI Stock Analysis

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Constellation Brands

(NYSE:STZ)

Rating:63Neutral
Price Target:
$197.00
▲( 6.82% Upside)
Constellation Brands' overall stock score reflects strong cash flow management and strategic corporate events, tempered by profitability challenges and a negative P/E ratio. While the company's revenue growth and strategic focus are favorable, economic uncertainties and tariff impacts remain significant concerns.
Positive Factors
Analyst Recommendations
Analyst upgrades Constellation Brands to Buy from Hold and raises the 12-month price target.
Earnings Performance
Constellation Brands closed out its fiscal year beating expectations on both the top and bottom lines and delivered FY25 EPS at the high-end of their updated guidance range.
Market Strategy
Strategic announcement should enable Constellation Brands to outpace its categories and produce more consistent performance relative to targets.
Negative Factors
Divestitures Impact
The sale of Svedka and 2025 Wine will result in a significant reduction in gross profit for the company in the coming fiscal year.
Growth Projections
Management lowered its multi-year (FY26-28) sales outlook notably below historical growth, citing the tough macro environment.
Macroeconomic Challenges
The anticipated slowdown in shipment volume growth raises concerns about the sustainability of beer gross margins in the long term.

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 primarily in the alcoholic beverage industry, with a diverse portfolio of well-known brands including Corona, Modelo, and Pacifico in the beer segment, as well as Robert Mondavi, Kim Crawford, and Meiomi in the wine segment. Constellation Brands is committed to delivering high-quality products and experiences to its consumers while driving growth and innovation across its various sectors.
How the Company Makes MoneyConstellation Brands generates revenue through the production, distribution, and sale of alcoholic beverages, primarily focusing on beer, wine, and spirits. The company earns money by selling its products to wholesalers, retailers, and directly to consumers. A significant portion of its revenue comes from its beer segment, particularly from its imported Mexican beer brands such as Corona and Modelo, which are highly popular in the U.S. market. Additionally, the wine and spirits segments contribute to its earnings through a range of premium and super-premium offerings. Constellation Brands also engages in strategic partnerships and acquisitions to expand its market presence and diversify its portfolio, which further enhances its revenue streams.

Constellation Brands Key Performance Indicators (KPIs)

Any
Any
Beer Case Shipments
Beer Case Shipments
Measures the volume of beer cases shipped, indicating demand strength, market penetration, and potential revenue growth in the beer segment.
Chart InsightsConstellation Brands' beer case shipments show a robust upward trend, peaking in recent quarters. However, the latest earnings call reveals a cautious outlook, with revised growth forecasts due to economic uncertainties and consumer sentiment shifts, particularly among Hispanic consumers. Despite these challenges, the company remains focused on strategic investments and cost savings to sustain growth. The commitment to shareholder returns and brand health, especially for key brands like Modelo and Corona, underscores their resilience in navigating market pressures.
Data provided by:Main Street Data

Constellation Brands Financial Statement Overview

Summary
Constellation Brands demonstrates strong revenue growth and robust cash flow management, though it faces challenges with profitability. The balance sheet is stable, with moderate leverage, yet negative profitability impacts return metrics. Improving profitability will be key for financial health enhancement.
Income Statement
65
Positive
Constellation Brands has shown consistent revenue growth over the years, achieving a 2.50% increase in the latest annual period. However, the company experienced a significant decline in profitability, with a negative net income for the most recent year, resulting in a net profit margin of -0.80%. The gross profit margin remains healthy at 52.06%, indicating strong product markups, but EBIT margin has decreased significantly. Overall, while revenue growth is a positive sign, the declining profitability is a concern.
Balance Sheet
60
Neutral
The company's balance sheet reflects a moderate debt-to-equity ratio of 0.12, indicating manageable leverage levels relative to equity. The return on equity is currently negative due to the net loss, which highlights potential inefficiencies in generating returns for shareholders. The equity ratio stands at 31.78%, suggesting a balanced asset financing structure. While the balance sheet is relatively stable, the negative profitability impacts the overall strength.
Cash Flow
75
Positive
Constellation Brands has demonstrated robust cash flow management, with a notable free cash flow growth of 28.31% in the latest period. The operating cash flow to net income ratio is exceptionally high due to the low or negative net income, indicating strong cash flow generation relative to earnings. The free cash flow to net income ratio is also strong. Overall, despite the earnings challenges, the company's cash flow position is a bright spot.
Breakdown
Mar 2025Mar 2024Mar 2023Mar 2022Mar 2021
Income StatementTotal Revenue
10.21B9.96B9.45B8.82B8.61B
Gross Profit
5.31B5.02B4.77B4.71B4.47B
EBIT
354.90M3.17B2.84B2.33B2.79B
EBITDA
774.30M3.08B1.26B1.09B3.31B
Net Income Common Stockholders
-81.40M1.73B-38.50M1.00M2.00B
Balance SheetCash, Cash Equivalents and Short-Term Investments
68.10M152.40M133.50M199.40M460.60M
Total Assets
21.65B25.69B24.66B25.86B27.10B
Total Debt
12.11B12.56B12.46B10.42B10.44B
Net Debt
12.05B12.41B12.33B10.22B9.98B
Total Liabilities
14.52B15.63B15.93B13.81B13.18B
Stockholders Equity
6.88B9.74B8.41B11.73B13.60B
Cash FlowFree Cash Flow
1.94B1.51B1.72B1.68B1.94B
Operating Cash Flow
3.15B2.78B2.76B2.71B2.81B
Investing Cash Flow
-974.80M-1.29B-999.40M-1.04B-87.90M
Financing Cash Flow
-2.26B-1.47B-1.82B-1.93B-2.35B

Constellation Brands Technical Analysis

Technical Analysis Sentiment
Negative
Last Price184.42
Price Trends
50DMA
184.07
Positive
100DMA
182.91
Positive
200DMA
210.46
Negative
Market Momentum
MACD
0.85
Positive
RSI
45.22
Neutral
STOCH
14.56
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 184.42 is below the 20-day moving average (MA) of 188.22, above the 50-day MA of 184.07, and below the 200-day MA of 210.46, indicating a neutral trend. The MACD of 0.85 indicates Positive momentum. The RSI at 45.22 is Neutral, neither overbought nor oversold. The STOCH value of 14.56 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for STZ.

Constellation Brands Risk Analysis

Constellation Brands disclosed 23 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 (65)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
78
Outperform
$39.59B15.5215.09%4.96%1.25%-13.02%
SASAM
73
Outperform
$2.59B38.357.36%0.79%-24.27%
CCCCU
72
Outperform
$2.56B14.7111.33%1.98%6.18%61.39%
DEDEO
71
Outperform
$61.02B16.8735.83%3.75%-1.21%-8.89%
TATAP
68
Neutral
$10.92B10.867.90%3.31%-5.17%-0.74%
65
Neutral
$8.84B14.904.69%203.33%3.49%-1.84%
STSTZ
63
Neutral
$32.83B49.10-0.98%2.20%2.47%-105.09%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
STZ
Constellation Brands
184.42
-56.24
-23.37%
SAM
Boston Beer
232.06
-27.45
-10.58%
CCU
Compania Cervecerias Unidas SA
13.86
1.33
10.61%
DEO
Diageo
109.20
-20.39
-15.73%
TAP
Molson Coors
54.01
2.69
5.24%
ABEV
Ambev SA
2.52
0.44
21.15%

Constellation Brands Earnings Call Summary

Earnings Call Date:Apr 09, 2025
(Q4-2025)
|
% Change Since: 1.11%|
Next Earnings Date:Jun 26, 2025
Earnings Call Sentiment Neutral
The earnings call highlights Constellation Brands' achievements in sales growth, brand health, and strategic fiscal management, while addressing challenges posed by economic conditions, revised growth forecasts, and consumer sentiment. The company remains committed to shareholder returns and operational efficiency, though uncertainty in the macroeconomic environment poses risks.
Q4-2025 Updates
Positive Updates
Enterprise Net Sales Growth
Despite a softer consumer demand backdrop, Constellation Brands delivered enterprise net sales growth, realized substantial comparable operating margin improvement, and achieved double-digit comparable EPS growth in fiscal year 2025.
Strong Cash Flow Projections
Constellation Brands is targeting approximately $9 billion in operating cash flow and $6 billion in free cash flow from fiscal 2026 to 2028, with ongoing investments in brewery development and expansions.
Cost Savings Initiatives
Expected restructuring actions in the Wine and Spirits Business are anticipated to yield over $200 million in net annualized cost savings across the enterprise by fiscal 2028.
Commitment to Capital Deployment and Shareholder Returns
The company remains committed to a disciplined capital deployment framework, including a 30% dividend payout ratio and a new three-year $4 billion share repurchase authorization.
Brand Health and Market Share Gains
Constellation Brands gained over 10% in share of space during last year's resets, and all brand health metrics remain strong, with increases in aided awareness and consideration for key brands such as Modelo, Corona, and Pacifico.
Negative Updates
Revised Beer Sales Growth Forecast
The medium-term beer sales growth forecast has been revised downward from 7%-9% to 2%-4% for fiscal 2027 and 2028, reflecting uncertainty in consumer sentiment and economic conditions.
Hispanic Consumer Concerns
The Hispanic consumer, who represents a significant portion of Constellation's Beer Business, has shown concern about higher prices, immigration issues, and job losses, leading to reduced spending on social gatherings and beer consumption.
Impact of Tariffs
The guidance includes the impact of tariffs announced by the U.S. and Canadian governments, affecting aluminum cans for the Beer Business and certain wine brands, potentially impacting costs and margins.
Softer Consumer Demand and Economic Conditions
The socioeconomic environment is expected to remain challenging, with no significant improvements anticipated over the forecast period, impacting consumer spending and sentiment.
Company Guidance
During the Constellation Brands Q4 Fiscal Year 2025 earnings call, the company provided guidance for the upcoming fiscal years. For fiscal year 2026, they anticipate a beer net sales growth rate between 0% to 3% and an operating income growth rate of 0% to 2%. For fiscal years 2027 and 2028, the beer net sales growth is expected to be between 2% to 4%, with operating margins projected to be approximately 39% to 40%. The company is also targeting around $9 billion in operating cash flow and $6 billion in free cash flow from fiscal 2026 to 2028. These projections take into account the expected impact of recently announced tariffs by the U.S. and Canadian governments, which will particularly affect their Wine and Spirits Business. Constellation Brands remains focused on driving distribution gains, disciplined innovation, and incremental marketing investments to support their Beer Business, while also implementing restructuring actions expected to yield over $200 million in net annualized cost savings by fiscal 2028. Additionally, the company has a new three-year $4 billion share repurchase authorization as part of its disciplined capital deployment framework.

Constellation Brands Corporate Events

Private Placements and FinancingBusiness Operations and Strategy
Constellation Brands Secures $500M Term Loan Agreement
Positive
May 9, 2025

On May 9, 2025, Constellation Brands entered into a Term Loan Credit Agreement with Bank of America and other lenders, allowing for a $500 million loan to be drawn in up to two parts. The company plans to use the funds for general corporate purposes, including debt repayment. The agreement includes various covenants and conditions similar to its existing credit facilities, and it is set to mature two years after the initial borrowing. This financial maneuver is expected to provide Constellation Brands with increased flexibility in managing its financial commitments and strategic initiatives.

Private Placements and Financing
Constellation Brands Announces $500M Senior Notes Offering
Neutral
Apr 29, 2025

On April 29, 2025, Constellation Brands announced the pricing of a public offering of $500 million in senior notes due in 2030, with a 4.800% interest rate. The proceeds from this offering, expected to close on May 1, 2025, will be used for general corporate purposes, including debt repayment and capital expenditures, potentially impacting the company’s financial flexibility and market position.

Executive/Board Changes
Constellation Brands Appoints New Chief HR Officer
Neutral
Apr 14, 2025

On April 14, 2025, Constellation Brands announced the appointment of Paula Erickson as the new Executive Vice President and Chief Human Resources Officer, effective April 21, 2025. Erickson, an industry veteran, will replace K. Kristann Carey, who will step down and leave the company in May 2025. Erickson’s extensive experience in talent strategy and organizational transformation is expected to enhance Constellation’s HR function and support its growth objectives.

M&A TransactionsStock BuybackDividendsBusiness Operations and StrategyFinancial Disclosures
Constellation Brands Divests Wine Brands to Focus Growth
Positive
Apr 9, 2025

On April 9, 2025, Constellation Brands announced the signing of an agreement with The Wine Group to divest and license trademarks of its remaining mainstream wine brands, including Woodbridge and Robert Mondavi Private Selection. This move is part of the company’s strategic initiatives to focus on higher growth segments and is expected to close after the fiscal quarter ending May 31, 2025. Additionally, Constellation declared a quarterly cash dividend and authorized a $4 billion share repurchase program, reflecting its commitment to returning value to shareholders. The company reported fiscal 2025 financial highlights, including a 5% net sales growth in its beer business and significant operating cash flow, despite a challenging consumer demand environment.

Glossary
OutperformA stock rated as "Outperform" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock is likely to deliver higher returns compared to the average returns of other stocks in the same sector or market index. Investors might consider this stock a good buying opportunity.
NeutralA stock rated as "Neutral" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly attractive nor unattractive for investment. Investors may consider holding onto the stock, as it is not expected to either significantly outperform or underperform the market.
UnderperformA stock rated as "Underperform" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests that the stock may deliver lower returns compared to the average returns of other stocks in the same sector or market index. Investors might consider selling the stock or avoiding it as an investment.

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.