Constellation Brands (STZ): Assessing Valuation After Recent Share Price Declines and Restructuring Updates

Constellation Brands (STZ) has seen subtle shifts in its stock price over the past month, prompting investors to take a closer look at underlying fundamentals and recent business performance for signals about potential future moves.

See our latest analysis for Constellation Brands.

This year has been a tough one for Constellation Brands shareholders, with the stock’s share price return year-to-date down 36.54% and the total shareholder return over the past year dropping 40.88%. Although there have been a few small positive moves this month, momentum remains subdued as investors weigh up the business’s long-term potential against recent headwinds.

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With shares trading well below analyst targets and long-term growth in question, investors face a key decision. Does Constellation Brands represent an overlooked value play, or is the market correctly pricing in challenges ahead?

Most Popular Narrative: 19.8% Undervalued

Constellation Brands’ most popular narrative values the company at $176.09 per share, a sizable gap versus last close at $141.24. This implies strong potential upside if consensus assumptions play out. This fair value reflects analysts’ belief in recovery potential and improved profitability, balanced against risk factors.

Constellation Brands anticipates significant improvements in its Wine & Spirits business post-2025 following the divestiture of mainstream wine brands and related restructuring actions. These actions are expected to yield over $200 million in net annualized cost savings across the enterprise by fiscal '28, which will positively impact operating margins and earnings.

Read the complete narrative.

Want to know the bold assumptions driving this gap? This narrative hinges on margin-boosting restructures and a turnaround fueled by highly optimistic profit projections. The underlying calculations are sure to surprise, especially with expected business transformation and earnings growth rates at the heart of the forecast. Unlock what this means for future share value.

Result: Fair Value of $176.09 (UNDERVALUED)

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

However, ongoing tariff changes and persistent margin pressures could derail the recovery narrative. These factors challenge assumptions about sustained earnings growth and valuation upside.

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

Build Your Own Constellation Brands Narrative

If you think there’s another side to the story or prefer your own hands-on analysis, you can use our tools to craft your own perspective in just a few minutes: 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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