Wine And Spirits Restructuring And Veracruz Brewery Expansion Will Succeed

Analysts have cut Constellation Brands’ price target from $183.00 to $179.78, citing sharp guidance reductions for FY26 amid persistent U.S. beer category headwinds, weaker demand (notably in higher-end segments and among Hispanic consumers), margin and inventory pressures, and concerns over management credibility following abrupt outlook changes.

Analyst Commentary

• Significant guidance cuts for FY26, especially on beer sales, driven by weak demand, distributor inventory rebalancing, and underperformance in higher-end beer segments.
• Increasing secular and structural pressures on the U.S. beer category, with negative velocity trends, unfavorable consumer dynamics (e.g., among Hispanic consumers), and evidence that demand headwinds are more than just macro-related.
• Margin deleverage and inventory destocking have been worse than expected, leading to more aggressive downward revisions of EPS estimates for FY26-28.
• Analyst concerns about company credibility, given the abrupt and sizable downward revisions to outlook shortly after previous guidance reaffirmations, plus fears that supply expansion may not align with true demand.
• Some bullish analysts see valuation as now “too cheap” and highlight a solid balance sheet and the potential for easing sales comparisons, though most maintain a cautious long-term outlook given persistent category and company-specific challenges.

What's in the News

• Canadian boycott of U.S. alcohol brands in response to trade disputes has led to a 62% drop in spirits exports and a 67% decline in wine exports from the U.S. to Canada, adversely impacting Constellation Brands alongside peers (Wall Street Journal, 2025-08-14).
• U.S. alcohol consumption has reached a record low according to a Gallup survey, as changing public perception about the health risks of drinking challenges industry demand (Reuters, 2025-08-13).
• Leading alcohol companies, including Constellation Brands, are pursuing opportunities in the cannabis beverage market, especially leveraging legal hemp-derived THC as a path to entry (Reuters, 2025-07-23).

Valuation Changes

Summary of Valuation Changes for Constellation Brands

• The Consensus Analyst Price Target remained effectively unchanged, moving only marginally from $183.00 to $179.78.
• The Consensus Revenue Growth forecasts for Constellation Brands has significantly fallen from -1.2% per annum to -1.6% per annum.
• The Net Profit Margin for Constellation Brands remained effectively unchanged, moving only marginally from 22.78% to 22.43%.