Constellation Brands Gears Up for Q3 Earnings Report Amid Mixed Performance
With a market cap of $40.4 billion, Constellation Brands, Inc. (STZ) is a major player in the beverage industry, focusing on beer, wine, and spirits from its headquarters in Victor, New York. Known for its premium offerings, the company boasts prestigious brands like Corona, Modelo, and Robert Mondavi. Investors are keenly awaiting the announcement of its fiscal Q3 earnings results, scheduled for Thursday, Jan. 9, before the market opens.
Earnings Expectations and Recent Trends
Analysts estimate that STZ will report a profit of $3.34 per share, reflecting a 4.7% increase from $3.19 per share a year ago. The company has consistently outperformed Wall Street’s earnings estimates, achieving this feat in each of the last four quarters. In the previous reporting period, STZ exceeded consensus estimates by 5.1%, largely driven by strong sales of its popular beer brands. These gains helped offset a downturn in its wine and spirits divisions.
Future Earnings Projections
Looking ahead to fiscal 2025, projections indicate that STZ could report earnings per share (EPS) of $13.72, a notable 13.8% increase from $12.06 in fiscal 2024. Anticipations for fiscal 2026 suggest continued growth, with an EPS estimate of $15.18, representing a year-over-year rise of 10.6%.
Stock Performance Overview
Despite its robust product line, STZ shares have experienced a 9.1% decline over the past year. This underperformance stands in stark contrast to the S&P 500 Index’s 23.8% rise and the Consumer Staples Select Sector SPDR Fund’s 8.8% increase during the same timeframe.
Market Reaction to Earnings Reports
The response to STZ’s Q2 earnings report on Oct. 3 was unfavorable, with shares dropping over 4% despite an adjusted EPS of $4.32. This decline can be attributed to an adjusted revenue of $3.1 billion, which fell short of market expectations. Additionally, the fiscal 2025 outlook raised concerns, predicting a 4%-6% decline in wine and spirits sales and a significant 16%-18% drop in segment operating income, overshadowing gains in the beer category.
Analysts’ Ratings and Projections
Overall, analysts maintain a positive outlook on Constellation Brands, giving it a “Strong Buy” rating. Among 21 analysts, 14 recommend a “Strong Buy,” two suggest a “Moderate Buy,” and five opt for a “Hold” rating. This is a shift from three months ago, when 16 analysts were behind a “Strong Buy.”
Currently, the average analyst price target for STZ is $290.14, indicating a potential upside of 32.1% from its current stock levels.
On the date of publication, Kritika Sarmah did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information, please view the Barchart Disclosure Policy here.
The views and opinions expressed herein are those of the author and do not necessarily reflect those of Nasdaq, Inc.
