Constellation Brands, Inc.
The company reported its results amid an exciting earnings season. Here are some key analyst takeaways.
Truist Securities On Constellation Brands
Analyst Bill Chappell reiterated a Hold rating, while reducing the price target from $265 to $255.
Constellation Brands reported net sales of $2.919 billion, slightly missing the consensus of $2.946 billion, while its adjusted earnings (ex-Canopy) came in at $4.32 per share, beating the Street's $4.08 per share expectation, Chappell said in a note. "The company also maintained the FY25 Sales and adj. EPS guidance it issued in early September," he added.
Corona Extra's sales contracted by 3% in the quarter, the analyst stated. "Now that the peak summer season is over, it will likely take 6-9 months before we see if its efforts to revive the brand bear fruit," he further wrote.
RBC Capital Markets On Constellation Brands
Analyst Nik Modi maintained an Outperform rating and price target of $308.
Beer depletions of 2.4% missed consensus of 3.7% due to "macro pressures and category sluggishness," Modi said. He added, however, that Constellation Brands still managed to deliver "best in class volume growth."
Channel checks suggest a strong beginning to the third quarter and September depletions are estimated to be up around 6%, the analyst stated. "We believe the biggest point of contention is in the back half guidance implying an acceleration of Beer depletions and W&S (Wine & Spirits) improvement," he further wrote.
Goldman Sachs On Constellation Brands
Analyst Bonnie Herzog reaffirmed a Buy rating and price target of $300.
The stock pullback following the release of results was partly triggered by "investor concerns about softer-than-expected FQ2 depletions in core beer brands (+5% Modelo Especial and -3% Corona Extra)," Herzog said.
The company could face "outsized pressures" in the third quarter due to "slower beer shipment volume growth and stepped-up marketing investments behind beer," he added.
There is also skepticism about Constellation Brands achieving mid-single-digit depletions in the back half, "given macro pressures impacting STZ's core Hispanic consumer (esp high unemployment in STZ's top 5 states: CA, TX, FL, NY, IL)," the analyst stated.
"While one can debate the impact and timing of macro trends improving, what is encouraging in our view is that nothing we heard today suggests any fundamental weakness in STZ's beer brands or the long-term opportunity," he further wrote.
Roth Capital Partners On Constellation Brands
Analyst Bill Kirk maintained a Buy rating and price target of $298.
Beer depletions are likely to reaccelerate in the back half and shipments should be "strong enough" for the company to deliver on its fiscal 2025 guidance, Kirk said. Trends have already improved from the summer levels, he added.
"Meanwhile, Beer profitability remains strong and Wine & Spirits perception is below financial contribution ($564mn carrying value for annual EBITDA of ~$400mn)," the analyst further stated.
STZ Price Action: Shares of Constellation Brands had risen by 0.63% to $245.21 at the time of publication on Friday.
