A Look at Constellation Brands’s Valuation as Industry Shifts Spark Strategic Moves and Renewed Investor Interest

Constellation Brands, facing headwinds from the ongoing decline in U.S. alcohol consumption and shifting consumer habits, is making strategic changes. The company is cutting costs and focusing on higher-growth categories as investor interest remains active.

See our latest analysis for Constellation Brands.

Amid all these shifts, Constellation Brands’ share price has struggled, posting a rough year-to-date share price return of -38.06% with a one-year total shareholder return of -40.37%. While news of cost-cutting and portfolio changes has sparked some recent optimism, heavy selling earlier in the year and diminished momentum make it clear that investors are still weighing the risks and waiting to see if the turnaround takes hold.

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With Constellation Brands trading well below analyst targets and signs of renewed Wall Street interest, the main question is whether this represents a discounted opportunity or if the market is already expecting a rebound in growth.

Most Popular Narrative: 19.5% Undervalued

Constellation Brands is currently trading well below the narrative’s fair value estimate, suggesting a significant upside from the latest closing price. The most followed outlook combines expectations for both operational recovery and financial discipline.

The company plans to generate approximately $9 billion in operating cash flow and $6 billion in free cash flow from fiscal '26 to fiscal '28. This robust cash flow will support investment in growth initiatives, primarily the modular development of their third brewery in Veracruz and additions to existing facilities in Mexico, potentially enhancing revenue.

Read the complete narrative.

Curious why such a bold recovery is at the heart of this valuation? There is a hidden earnings leap and margin transformation embedded in the numbers that could radically alter the stock’s trajectory. Which forecasted financial shifts drive this view? The answer is in the full narrative—don’t miss it.

Result: Fair Value of $171.22 (UNDERVALUED)

Have a read of the narrative in full and understand what's behind the forecasts.

However, persistent margin pressures and uncertain U.S. demand could quickly undermine these recovery projections if cost challenges or consumer pullbacks intensify.

Find out about the key risks to this Constellation Brands narrative.

Another View: What Do Market Multiples Show?

Looking from another angle, the company is trading at a price-to-earnings ratio of 19.6x. This is slightly higher than its peer group at 19.4x and notably above the industry average of 17.8x. While current valuations suggest a degree of optimism, the fair ratio sits at 21.7x, which may indicate some room for upward adjustment. This raises questions about whether the current level reflects optimism for a rebound or if it exposes investors to valuation risks.

See what the numbers say about this price — find out in our valuation breakdown.

Build Your Own Constellation Brands Narrative

Feeling inspired to dig into the numbers yourself? It only takes a few minutes to review the latest data and shape your own perspective. Do it your way

A great starting point for your Constellation Brands research is our analysis highlighting 4 key rewards and 2 important warning signs that could impact your investment decision.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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