STZ: Easing Headwinds And New Capacity Will Support Recovery Into 2026

Constellation Brands’ analyst price target has been cut from approximately $172 to $171. This revision reflects tempered revenue growth expectations and recent company guidance reductions, as analysts cite softer beer demand, inventory rebalancing, and increased margin pressures as factors behind the downgrade.

Analyst Commentary

Analysts have recently issued a flurry of research notes recalibrating their expectations for Constellation Brands, in the wake of the company's revised outlook and ongoing industry headwinds. While sentiment has generally turned more cautious, opinions diverge on the company's future growth and value proposition.

Bullish Takeaways

• Bullish analysts believe downside has largely been priced in, suggesting future earnings announcements may not spark significant negative reactions.
• Some foresee top-line trends improving into the 2026 fiscal year, especially as year-over-year comparisons ease after this period of softness.
• Despite the lowered price targets, several maintain positive or outperform ratings, highlighting confidence in long-term brand strength and execution potential.
• Anticipation of new modular capacity coming online is viewed as a potential benefit for supply flexibility, supporting recovery if demand stabilizes.

Bearish Takeaways

• Bearish analysts express concerns that guidance reductions may not be over, as management continues to base forecasts on current demand without clear evidence of stabilization.
• The magnitude and timing of the guidance cut, especially so soon after reaffirming outlooks, have raised questions about the company’s credibility and planning process.
• Persistent margin pressures and inventory rebalancing are expected to weigh on performance, with lower equity in earnings and a higher effective tax rate also impacting EPS growth.
• Broader industry data reveal sustained secular pressures on U.S. alcohol consumption, indicating headwinds that may extend beyond cyclical factors.

What's in the News

• Modelo launched Modelo Noche Especial, a limited-edition amber lager inspired by the Noche Buena celebration. The release aims to attract U.S. Hispanic consumers who are interested in culturally relevant and seasonal brews. (Key Developments)
• Wells Fargo Securities, LLC has been both added to and removed as Co-Lead Underwriter for Constellation Brands’ $498.58 million Fixed-Income Offering in recent weeks. (Key Developments)
• The company completed a share repurchase, buying back 3,375,602 shares for $604.02 million. This represents 1.9% of outstanding shares under its buyback plan announced in April 2025. (Key Developments)
• Constellation Brands amended and restated its By-Laws, making changes to align with Delaware law and clarifying procedures for meetings and proxies. (Key Developments)
• Constellation Brands further lowered its earnings and sales growth guidance for the fiscal year ending February 2026 and indicated anticipation of continued negative trends. (Key Developments)

Valuation Changes

• Consensus Analyst Price Target has decreased slightly from $172.09 to $171.22, reflecting revised outlooks and guidance.
• Discount Rate remains nearly unchanged, moving marginally lower from 6.96% to 6.96%.
• Revenue Growth Estimate has fallen significantly from +1.37% to -2.36%, indicating a shift to anticipated revenue contraction.
• Net Profit Margin has ticked up modestly from 22.48% to 22.51%.
• Future P/E Ratio estimate has edged down from 15.37x to 15.29x.