Will Berkshire’s New Stake in Constellation Brands (STZ) Reshape Its Value Investor Narrative?

• In the past week, Berkshire Hathaway led by Warren Buffett disclosed a new investment exceeding US$1 billion in Constellation Brands, alongside two other consumer-focused companies, as a final move before Buffett’s expected retirement. Buffett's choice highlights Constellation Brands' appeal to value investors seeking businesses with consistent demand and dividend longevity.
• With Warren Buffett’s endorsement through a significant new holding, we’ll assess how investor confidence may shape Constellation Brands’ investment narrative going forward.

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Constellation Brands Investment Narrative Recap

To be a shareholder in Constellation Brands, you need to believe in the durability of its core beer and premium spirits businesses, as well as the company's ability to generate consistent cash flow and sustain dividends through varying consumer cycles. Berkshire Hathaway’s recent US$1 billion investment underlines positive sentiment, yet it does not immediately change the biggest short-term catalyst, cost savings from ongoing restructuring, or the main risk, which remains exposure to new tariffs and inflation impacting margins. The company’s ongoing share buyback program, having already repurchased over US$900 million in shares since April 2025, is particularly relevant here. Share repurchases reflect management’s commitment to capital returns and may help offset pressures from slower top-line growth or cost headwinds, acting as a support for earnings per share while uncertainties remain. Yet, in contrast to these shareholder-friendly moves, investors should remain alert to the lingering risk around tariffs and input cost inflation, especially as ...

Read the full narrative on Constellation Brands (it's free!)

Constellation Brands' narrative projects $9.7 billion in revenue and $2.2 billion in earnings by 2028. This requires a 1.2% annual revenue decline but an increase in earnings of about $2.6 billion from the current $-442.3 million.

Uncover how Constellation Brands' forecasts yield a $172.61 fair value, a 31% upside to its current price.

Exploring Other Perspectives

Fifteen member estimates from the Simply Wall St Community place Constellation Brands’ fair value between US$120.67 and US$334.08. With ongoing restructuring aimed at cost reductions, the company’s near-term financial path is a source of widely differing opinion you can compare for yourself.

Explore 15 other fair value estimates on Constellation Brands - why the stock might be worth over 2x more than the current price!

Build Your Own Constellation Brands Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• 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.
• Our free Constellation Brands research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Constellation Brands' overall financial health at a glance.

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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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