Constellation Brands (STZ) AI Stock Analysis

• Market Cap: $32.83B
• Dividend Yield: 2.2%
• Average Volume (3M): 1.52M
• Price to Earnings (P/E): 49.1
• Beta (1Y): 0.47
• Revenue Growth: 2.47%
• EPS Growth: -105.09%
• Country: US
• Employees: 10,600
• Sector: Consumer Defensive
• Sector Strength: 76
• Industry: Beverages - Wineries & Distilleries
• EPS (TTM): 2.63
• Shares Outstanding: 177,993,030
• 10 Day Avg. Volume: 1,704,633
• 30 Day Avg. Volume: 1,521,629
• PEG Ratio: 3.73
• Price to Book (P/B): 4.97
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 17.46
• Enterprise Value/Market Cap: 1.40
• Enterprise Value/Revenue: 1.13
• Enterprise Value/Gross Profit: 8.66
• Enterprise Value/Ebitda: 5.92
• 1Y Price Target: $207.17
• Price Target Upside: 12.34% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

• Rating: 63 Neutral
• 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 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 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 Money

Constellation 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 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

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

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

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 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
10.21B	9.96B	9.45B	8.82B	8.61B
	Gross Profit
5.31B	5.02B	4.77B	4.71B	4.47B
	EBIT
354.90M	3.17B	2.84B	2.33B	2.79B
	EBITDA
774.30M	3.08B	1.26B	1.09B	3.31B
	Net Income Common Stockholders
-81.40M	1.73B	-38.50M	1.00M	2.00B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
68.10M	152.40M	133.50M	199.40M	460.60M
	Total Assets
21.65B	25.69B	24.66B	25.86B	27.10B
	Total Debt
12.11B	12.56B	12.46B	10.42B	10.44B
	Net Debt
12.05B	12.41B	12.33B	10.22B	9.98B
	Total Liabilities
14.52B	15.63B	15.93B	13.81B	13.18B
	Stockholders Equity
6.88B	9.74B	8.41B	11.73B	13.60B
Cash Flow		Free Cash Flow
1.94B	1.51B	1.72B	1.68B	1.94B
	Operating Cash Flow
3.15B	2.78B	2.76B	2.71B	2.81B
	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 Price: 184.42
• 50DMA: Positive
• 100DMA: Positive
• 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 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 Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABEV	78 Outperform	$39.59B	15.52	15.09%	4.96%	1.25%	-13.02%
SAM	73 Outperform	$2.59B	38.35	7.36%	―	0.79%	-24.27%
CCU	72 Outperform	$2.56B	14.71	11.33%	1.98%	6.18%	61.39%
DEO	71 Outperform	$61.02B	16.87	35.83%	3.75%	-1.21%	-8.89%
TAP	68 Neutral	$10.92B	10.86	7.90%	3.31%	-5.17%	-0.74%
Sector *	65 Neutral	$8.84B	14.90	4.69%	203.33%	3.49%	-1.84%
STZ	63 Neutral	$32.83B	49.10	-0.98%	2.20%	2.47%	-105.09%

Constellation Brands Corporate Events

Constellation Brands Secures $500M Term Loan Agreement

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.

Constellation Brands Announces $500M Senior Notes Offering

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.

Constellation Brands Appoints New Chief HR Officer

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.

Constellation Brands Divests Wine Brands to Focus Growth

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.