Stock Analysis

Earnings Update: Constellation Brands, Inc. (NYSE:STZ) Just Reported Its Yearly Results And Analysts Are Updating Their Forecasts

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Last week saw the newest full-year earnings release from Constellation Brands, Inc. (NYSE:STZ), an important milestone in the company's journey to build a stronger business. Results were roughly in line with estimates, with revenues of US$10.0b and statutory earnings per share of US$9.39. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

View our latest analysis for Constellation Brands

NYSE:STZ Earnings and Revenue Growth April 26th 2024

Taking into account the latest results, the most recent consensus for Constellation Brands from 22 analysts is for revenues of US$10.6b in 2025. If met, it would imply a modest 6.6% increase on its revenue over the past 12 months. Per-share earnings are expected to surge 42% to US$13.37. Yet prior to the latest earnings, the analysts had been anticipated revenues of US$10.6b and earnings per share (EPS) of US$13.34 in 2025. So it's pretty clear that, although the analysts have updated their estimates, there's been no major change in expectations for the business following the latest results.

There were no changes to revenue or earnings estimates or the price target of US$300, suggesting that the company has met expectations in its recent result. The consensus price target is just an average of individual analyst targets, so - it could be handy to see how wide the range of underlying estimates is. Currently, the most bullish analyst values Constellation Brands at US$330 per share, while the most bearish prices it at US$264. This is a very narrow spread of estimates, implying either that Constellation Brands is an easy company to value, or - more likely - the analysts are relying heavily on some key assumptions.

Taking a look at the bigger picture now, one of the ways we can understand these forecasts is to see how they compare to both past performance and industry growth estimates. The analysts are definitely expecting Constellation Brands' growth to accelerate, with the forecast 6.6% annualised growth to the end of 2025 ranking favourably alongside historical growth of 4.5% per annum over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 4.9% annually. Factoring in the forecast acceleration in revenue, it's pretty clear that Constellation Brands is expected to grow much faster than its industry.

The Bottom Line

The most obvious conclusion is that there's been no major change in the business' prospects in recent times, with the analysts holding their earnings forecasts steady, in line with previous estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Keeping that in mind, we still think that the longer term trajectory of the business is much more important for investors to consider. At Simply Wall St, we have a full range of analyst estimates for Constellation Brands going out to 2027, and you can see them free on our platform here..

That said, it's still necessary to consider the ever-present spectre of investment risk. We've identified 2 warning signs with Constellation Brands , and understanding these should be part of your investment process.

Valuation is complex, but we're helping make it simple.

Find out whether Constellation Brands is potentially over or undervalued by checking out our comprehensive analysis, which includes fair value estimates, risks and warnings, dividends, insider transactions and financial health.

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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.