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Constellation Brands (STZ)
NYSE:STZ

Constellation Brands (STZ) AI Stock Analysis

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Constellation Brands

(NYSE:STZ)

65Neutral
Constellation Brands' strong revenue growth and cash flow are offset by profitability challenges and potential overvaluation concerns. Strategic initiatives and shareholder-focused actions are promising, but macroeconomic uncertainties and revised sales forecasts pose risks.
Positive Factors
Earnings Performance
STZ 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.
Premium Portfolio Focus
Wine divestiture materially reduces impact of W&S on STZ’s earnings profile, while concentrating portfolio in premium should bring improved segment growth profile over time.
Strategic Realignment
Strategic announcement should enable STZ to outpace its categories and produce more consistent performance relative to targets.
Negative Factors
Beer Market Challenges
Expect FY26 beer profits to be challenged due to incremental COGS and D&A pressure.
Medium-Term Outlook
Management lowered its multi-year (FY26-28) sales outlook notably below historical growth, citing the tough macro environment.
Sales Target Reduction
Reducing medium term sales targets by more than half to +2%-4% is a more realistic expectation given its now larger share of a secular declining category.

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

Constellation Brands Business Overview & Revenue Model

Company DescriptionConstellation Brands, Inc. is a leading beverage alcohol company operating in the beverage industry. It is known for its wide range of premium wine, spirits, and beer, with a strong focus on imported beer brands. The company’s portfolio includes well-known brands such as Corona, Modelo, and Pacifico in the beer segment, as well as a diverse range of wine and spirits brands. With operations primarily in North America, Constellation Brands is committed to delivering high-quality products that cater to a variety of consumer preferences.
How the Company Makes MoneyConstellation Brands primarily generates revenue through the sale of its alcoholic beverage products across various segments, including beer, wine, and spirits. The beer segment is a significant revenue driver, particularly through the sale of its popular imported Mexican beer brands like Corona and Modelo. The company's wine and spirits segment also contributes to its revenue through a diverse array of premium and super-premium products. Additionally, strategic partnerships and acquisitions have bolstered its product offerings and market presence. Constellation Brands capitalizes on its strong distribution network and marketing strategies to ensure widespread availability and visibility of its products, further enhancing its revenue potential.

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 have shown a strong upward trend, reaching record levels in recent quarters. This aligns with the company's strategic focus on its beer segment, which continues to outperform despite macroeconomic headwinds. The latest earnings call highlights robust growth in key brands like Modelo Especial and Pacifico, driving this momentum. However, the company has adjusted its growth outlook slightly due to soft consumer demand. Investors should note the resilience of the beer segment, which remains a bright spot amid challenges in other areas of the business.
Data provided by:Main Street Data

Constellation Brands Financial Statement Overview

Summary
Constellation Brands shows strong revenue growth and cash flow generation. However, profitability challenges and a negative net income impact its financial health, despite a stable balance sheet with moderate leverage.
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
354.90M3.08B1.26B1.09B3.31B
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
806.70M12.56B12.46B10.42B10.44B
Net Debt
738.60M12.41B12.33B10.22B9.98B
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
Neutral
Last Price185.44
Price Trends
50DMA
180.55
Positive
100DMA
189.60
Negative
200DMA
214.63
Negative
Market Momentum
MACD
1.73
Negative
RSI
54.50
Neutral
STOCH
48.08
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 185.44 is above the 20-day moving average (MA) of 182.79, above the 50-day MA of 180.55, and below the 200-day MA of 214.63, indicating a neutral trend. The MACD of 1.73 indicates Negative momentum. The RSI at 54.50 is Neutral, neither overbought nor oversold. The STOCH value of 48.08 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 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 (64)
Financial Indicators
Name
Overall Rating
Market Cap
P/E Ratio
ROE
Dividend Yield
Revenue Growth
EPS Growth
83
Outperform
$40.45B14.8616.55%4.93%3.69%-8.13%
CCCCU
79
Outperform
$2.83B16.4711.55%1.67%0.15%35.56%
DEDEO
72
Outperform
$59.80B16.9235.83%3.66%-1.21%-8.89%
SASAM
70
Outperform
$2.75B49.807.36%0.79%-24.27%
TATAP
68
Neutral
$11.66B10.768.54%3.11%-0.64%22.45%
STSTZ
65
Neutral
$33.55B49.10-0.98%2.15%2.47%-105.09%
64
Neutral
$8.82B14.874.61%174.99%3.74%5.11%
* Consumer Defensive Sector Average
Performance Comparison
Ticker
Company Name
Price
Change
% Change
STZ
Constellation Brands
185.44
-63.64
-25.55%
SAM
Boston Beer
244.85
-34.13
-12.23%
CCU
Compania Cervecerias Unidas SA
15.20
3.02
24.79%
DEO
Diageo
111.31
-20.73
-15.70%
TAP
Molson Coors
57.25
1.24
2.21%
ABEV
Ambev SA
2.49
0.22
9.69%

Constellation Brands Earnings Call Summary

Earnings Call Date:Apr 09, 2025
(Q4-2025)
|
% Change Since: 1.67%|
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 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.

Spark’s Take on STZ Stock

According to Spark, TipRanks’ AI Analyst, STZ is a Neutral.

Constellation Brands’ strong revenue growth and cash flow are offset by profitability challenges and potential overvaluation concerns. Strategic initiatives and shareholder-focused actions are promising, but macroeconomic uncertainties and revised sales forecasts pose risks.

To see Spark’s full report on STZ stock, click here.

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.

Spark’s Take on STZ Stock

According to Spark, TipRanks’ AI Analyst, STZ is a Neutral.

Constellation Brands exhibits a solid financial foundation with strong revenue growth and improved profitability, but faces challenges with margin pressures and cash flow management. While the beer segment shows resilience, the wine and spirits segment struggles. Technical indicators suggest mixed momentum, and the high P/E ratio points to potential overvaluation. Strategic initiatives like capital returns provide support, but overall, caution is advised due to valuation concerns and segment-specific challenges.

To see Spark’s full report on STZ stock, click here.

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.

Spark’s Take on STZ Stock

According to Spark, TipRanks’ AI Analyst, STZ is a Neutral.

Constellation Brands exhibits a solid financial foundation with strong revenue growth and improved profitability, but faces challenges with margin pressures and cash flow management. While the beer segment shows resilience, the wine and spirits segment struggles. Technical indicators suggest mixed momentum, and the high P/E ratio points to potential overvaluation. Strategic initiatives like capital returns provide support, but overall, caution is advised due to valuation concerns and segment-specific challenges.

To see Spark’s full report on STZ stock, click here.

Executive/Board ChangesBusiness Operations and Strategy
Constellation Brands Announces Executive Leadership Change
Neutral
Feb 18, 2025

On February 18, 2025, Constellation Brands announced the departure of E. Yuri Hermida, Executive Vice President, Chief Growth & Strategy Officer, effective February 28, 2025. Mallika Monteiro, Executive Vice President, Managing Director – Beer Brands, will temporarily assume his responsibilities in addition to her current role. The transition reflects Constellation’s commitment to maintaining its strategic growth as it progresses towards long-term aspirations.

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.