Constellation Brands, Inc. (STZ) | Investment Case

1. Company Snapshot

1.a. Company Description

Constellation Brands, Inc., together with its subsidiaries, produces, imports, markets, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy.It provides beer primarily under the Corona Extra, Corona Premier, Corona Familiar, Corona Light, Corona Refresca, Corona Hard Seltzer, Modelo Especial, Modelo Negra, Modelo Chelada, Pacifico, and Victoria brands.The company offers wine under the 7 Moons, Cook's California Champagne, Cooper & Thief, Crafters Union, Kim Crawford, Meiomi, Mount Veeder, Ruffino, SIMI, The Dreaming Tree, Charles Smith, The Prisoner Wine Company, Robert Mondavi, My Favorite Neighbor, and Schrader; and spirits under the Casa Noble, Copper & Kings, High West, Mi CAMPO, Nelson's Green Brier, and SVEDKA brands.

It provides its products to wholesale distributors, retailers, on-premise locations, and state alcohol beverage control agencies.Constellation Brands, Inc.was founded in 1945 and is headquartered in Victor, New York.

Show Full description

1.b. Last Insights on STZ

Constellation Brands' recent performance was negatively impacted by a challenging macroeconomic backdrop, slowing consumer demand, and decreasing demand for its beers among the Hispanic community in the U.S. The company's updated guidance signals meaningful shrinkage in sales and earnings, highlighting ongoing operational challenges. High debt and a shrinking core beer segment make the stock expensive relative to its deteriorating fundamentals. Additionally, the company cited tariffs as a contributing factor to its lowered fiscal 2026 outlook.

1.c. Company Highlights

Last Price	141.31
Change Percentage	2.38%
Open	137.71
Previous Close	138.03
Market Cap ( Millions)	24755
Volume	1004012
Year High	245.31
Year Low	126.45
M A 50	135.38
M A 200	162.84

FCF Yield	7.46%
Dividend Yield	2.88%
ROE	16.60%
Debt / Equity	133.87%
Net Debt / EBIDTA	390.17%
Price To Book	3.32
Price Earnings Ratio	20.34
Price To FCF	13.41
Price To sales	2.57
EV / EBITDA	13.6

2. Constellation Brands Posts Mixed Q2 FY2026 Results Amidst Macro Headwinds

Constellation Brands reported a mixed bag in its Q2 FY2026 results, with earnings per share (EPS) coming in at $3.63, beating estimates of $3.37. Revenue was impacted by macroeconomic factors, particularly concerns about the socioeconomic environment and inflation, which negatively affected beer volume growth. Despite this, the company's beer portfolio saw share gains, driven by brands like Corona and Modelo. The company's margins remained strong at around 39-40%, despite some deleverage due to lower volumes.

Publication Date: Oct -08

                                    📋 Highlights
                                    Modelo Especial Market Share::
                                                Maintained leading position with 10% U.S. dollar sales market share, two points ahead of the next largest beer brand.
Corona Sunbrew Performance::
                                                Became the number one dollar SKU and the fourth-largest share gainer in the beer category.
Margin Resilience::
                                                Margins expected to remain strong at 39-40% despite volume challenges and macroeconomic headwinds.
Wine & Spirits Recovery::
                                                Anticipated H2 improvement driven by higher volumes and vintage releases post-2023 divestitures.
Full-Year Guidance::
                                                Maintained despite H2 margin compression from seasonal factors and fixed costs, with confidence in returning to low 20% operating margins by FY2027.

                                

Financial Performance

The company's financial performance was a mixed bag, with EPS beating expectations but beer volumes being negatively impacted by macroeconomic headwinds. The wine and spirits business is expected to improve in the second half of the year due to higher volume and vintage releases. The company maintained its full-year guidance but expects margin compression in the second half due to seasonal factors and higher fixed costs.

Brand Performance

Despite the headwinds, Constellation Brands' key beer brands, such as Corona and Modelo, are experiencing increased loyalty. Corona Sunbrew, a new offering, has been particularly successful, becoming the number one dollar SKU and the fourth largest share gainer in the category. Modelo Especial remains the top-selling beer in the U.S. by dollar sales with a 10% market share.

Macroeconomic Challenges

The company is closely monitoring macroeconomic conditions and consumer behavior, particularly in high Hispanic zip codes, where results are significantly worse than the general market. California has been a major challenge due to construction jobs not materializing as expected, impacting beer sales. However, the company remains cautiously optimistic about potential improvement.

Valuation

With a P/E Ratio of 13.69 and an EV/EBITDA of 10.35, the company's valuation appears reasonable. The company's Return on Equity (ROE) stands at 24.93%, indicating strong profitability. Analysts estimate next year's revenue growth at -11.2%, which may impact the company's stock performance. However, the company's robust portfolio, strong brands, and strategic initiatives are expected to drive long-term growth.

3. NewsRoom

Constellation Brands to Report Third Quarter 2026 Financial Results on January 7, 2026 After Market Close and Host Conference Call on January 8, 2026 at 10:30 AM ET

Dec -04

Source: globenewswire.com

Constellation Brands: A High-Quality Business Facing Temporary Problems, or Something Worse?

Dec -03

Source: fool.com

Arrowstreet Capital Limited Partnership Raises Stock Position in Constellation Brands Inc $STZ

Dec -03

Source: defenseworld.net

Read This Before Buying Constellation Brands Stock

Nov -30

Source: fool.com

Constellation Brands Stock Sell-Off: Should You Buy the Dip?

Nov -29

Source: fool.com

Artisan Value Income Fund Q3 2025 Portfolio Activity

Nov -24

Source: seekingalpha.com

1 Magnificent S&P 500 Dividend Stock Down 52% to Buy and Hold Forever

Nov -22

Source: fool.com

Top Sin Stocks to Buy Now for Power, Predictability & Long-Term Gains

Nov -20

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.56%)

6. Segments

Beer

Expected Growth: 6.4%

Growing popularity of Mexican beer brands, increasing demand for premium products, and Constellation Brands' strong distribution network drive growth in the beer segment, featuring iconic brands like Corona, and Pacifico.

Wine and Spirits

Expected Growth: 7.4%

Constellation Brands’ growth is driven by increasing demand for premium beer and wine, innovative product launches, and strategic acquisitions.

7. Detailed Products

Beer

Constellation Brands offers a wide range of beer brands, including Corona, Modelo, and Pacifico, among others.

Wine

Constellation Brands produces and distributes a variety of wine brands, including Robert Mondavi, Clos du Bois, and Kim Crawford.

Spirits

Constellation Brands offers a range of spirits, including Svedka Vodka, High West Whiskey, and Casa Noble Tequila.

Cannabis

Constellation Brands has a significant stake in Canopy Growth, a leading cannabis company, offering a range of cannabis products.

8. Constellation Brands, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Constellation Brands, Inc. operates in the beverage industry, where substitutes are available, but the company's strong brand portfolio and diversified product offerings mitigate the threat.

Bargaining Power Of Customers

Constellation Brands, Inc. has a large customer base, but the bargaining power of customers is limited due to the company's strong brand recognition and diversified product offerings.

Bargaining Power Of Suppliers

Constellation Brands, Inc. relies on suppliers for raw materials, but the company's scale and diversified supply chain mitigate the bargaining power of suppliers.

Threat Of New Entrants

The beverage industry has high barriers to entry, and Constellation Brands, Inc.'s strong brand portfolio and established distribution network make it difficult for new entrants to compete.

Intensity Of Rivalry

The beverage industry is highly competitive, with many established players, and Constellation Brands, Inc. faces intense rivalry from other major beverage companies.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	55.10%
Debt Cost	4.36%
Equity Weight	44.90%
Equity Cost	8.64%
WACC	6.28%
Leverage	122.74%

11. Quality Control: Constellation Brands, Inc. passed 5 out of 9 key points

Strong Liquidity

Low Deb

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Sysco

A-Score: 6.4/10

Value: 4.3

Growth: 6.9

Quality: 4.2

Yield: 6.0

Momentum: 7.0

Volatility: 10.0

1-Year Total Return ->

Kroger

A-Score: 6.0/10

Value: 5.7

Growth: 5.6

Quality: 4.0

Yield: 4.0

Momentum: 8.0

Volatility: 9.0

1-Year Total Return ->

Walmart

A-Score: 5.5/10

Value: 2.4

Growth: 5.4

Quality: 4.8

Yield: 2.0

Momentum: 8.5

Volatility: 9.7

1-Year Total Return ->

Costco Wholesale

A-Score: 5.4/10

Value: 1.4

Growth: 7.0

Quality: 5.7

Yield: 2.0

Momentum: 6.0

Volatility: 10.0

1-Year Total Return ->

Procter & Gamble

A-Score: 5.3/10

Value: 2.8

Growth: 4.4

Quality: 7.4

Yield: 5.0

Momentum: 2.0

Volatility: 10.0

1-Year Total Return ->

Constellation Brands

A-Score: 5.0/10

Value: 4.7

Growth: 3.9

Quality: 8.2

Yield: 5.0

Momentum: 0.0

Volatility: 8.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-2.58%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

6.28%

Constellation Brands, Inc. - US21036P1084

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on STZ

1.c. Company Highlights

Expensive

Less Volatile

Average Quality

Earnings Beats

Revenues Beats

Earnings Miss

Revenues Miss

Medium Volatility

Stable Momentum

Weak Momentum

Fairly Valued

Lower Quality

Average Growth

Better Quality

2. Constellation Brands Posts Mixed Q2 FY2026 Results Amidst Macro Headwinds

Financial Performance

Brand Performance

Macroeconomic Challenges

Valuation

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (6.56%)

6. Segments

Beer

Expected Growth: 6.4%

Wine and Spirits

Expected Growth: 7.4%

7. Detailed Products

Beer

Wine

Spirits

Cannabis

8. Constellation Brands, Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Constellation Brands, Inc. passed 5 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

141.31$

Current Price

141.31$

Potential

-0.00%

Expected Cash-Flows

12.e Scoring ^Insights

12.f DCF ^BETA