Is Now An Opportune Moment To Examine Constellation Brands, Inc. (NYSE:STZ)?

Today we're going to take a look at the well-established Constellation Brands, Inc. (NYSE:STZ). The company's stock received a lot of attention from a substantial price movement on the NYSE over the last few months, increasing to US$261 at one point, and dropping to the lows of US$209. Some share price movements can give investors a better opportunity to enter into the stock, and potentially buy at a lower price. A question to answer is whether Constellation Brands' current trading price of US$216 reflective of the actual value of the large-cap? Or is it currently undervalued, providing us with the opportunity to buy? Let’s take a look at Constellation Brands’s outlook and value based on the most recent financial data to see if there are any catalysts for a price change.

Check out our latest analysis for Constellation Brands

What's The Opportunity In Constellation Brands?

Good news, investors! Constellation Brands is still a bargain right now. My valuation model shows that the intrinsic value for the stock is $306.91, which is above what the market is valuing the company at the moment. This indicates a potential opportunity to buy low. What’s more interesting is that, Constellation Brands’s share price is quite volatile, which gives us more chances to buy since the share price could sink lower (or rise higher) in the future. This is based on its high beta, which is a good indicator for how much the stock moves relative to the rest of the market.

What kind of growth will Constellation Brands generate?

Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Although value investors would argue that it’s the intrinsic value relative to the price that matter the most, a more compelling investment thesis would be high growth potential at a cheap price. With profit expected to more than double over the next couple of years, the future seems bright for Constellation Brands. It looks like higher cash flow is on the cards for the stock, which should feed into a higher share valuation.

What This Means For You

Are you a shareholder? Since STZ is currently undervalued, it may be a great time to increase your holdings in the stock. With a positive outlook on the horizon, it seems like this growth has not yet been fully factored into the share price. However, there are also other factors such as capital structure to consider, which could explain the current undervaluation.

Are you a potential investor? If you’ve been keeping an eye on STZ for a while, now might be the time to make a leap. Its prosperous future outlook isn’t fully reflected in the current share price yet, which means it’s not too late to buy STZ. But before you make any investment decisions, consider other factors such as the strength of its balance sheet, in order to make a well-informed buy.

If you'd like to know more about Constellation Brands as a business, it's important to be aware of any risks it's facing. In terms of investment risks, we've identified 1 warning sign with Constellation Brands, and understanding this should be part of your investment process.

If you are no longer interested in Constellation Brands, you can use our free platform to see our list of over 50 other stocks with a high growth potential.

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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.