Constellation Brands Faces Challenges and Opportunities Amid Changing Trends
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 26 2026
0mins
Should l Buy STZ?
Source: Fool
- Market Share Dynamics: Constellation Brands has seen steady market share gains in the U.S. since acquiring Modelo, Corona, and Pacifico in 2013, although recent trends show a 2.2% year-over-year decline in beer shipments and a 1% drop in net sales and operating income due to decreasing alcohol consumption among younger generations.
- Revenue Fluctuations: The company's revenue has fallen from a peak of nearly $10 billion in 2024 to $9.4 billion over the past 12 months, reflecting long-term changes in alcohol consumption trends, particularly as the percentage of U.S. drinkers has dropped to 54%, the lowest level on record.
- Attractive Stock Valuation: Despite the challenges of declining consumption, Constellation Brands' stock trades at just 11.6 times trailing operating earnings and offers a 2.56% dividend yield, making it appealing for contrarian investors, especially given the company's ongoing stock repurchase program.
- Long-Term Growth Potential: With continued market share gains and enhanced pricing power, Constellation Brands' earnings are expected to gradually recover over the next few years, suggesting that while short-term challenges exist, long-term holding could yield significant returns for investors.
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Analyst Views on STZ
Wall Street analysts forecast STZ stock price to rise
15 Analyst Rating
7 Buy
7 Hold
1 Sell
Moderate Buy
Current: 151.090
Low
135.00
Averages
163.00
High
209.00
Current: 151.090
Low
135.00
Averages
163.00
High
209.00
About STZ
Constellation Brands, Inc. is a producer and marketer of beer, wine, and spirits with operations in the United States, Mexico, New Zealand, and Italy with brands, such as Corona Extra, Modelo Especial, Robert Mondavi Winery, Kim Crawford, The Prisoner Wine Company, High West, Casa Noble, and Mi CAMPO. Its segments include Beer, Wine and Spirits, and Corporate Operations and Other. In the Beer segment, its portfolio consists of high-end imported beer brands and ABAs. It has a perpetual brand license to produce its Mexican beer portfolio and to import, market, and sell such a portfolio in the United States. In the Wine and Spirits segment, it sells a portfolio that includes higher-end wine brands complemented by certain higher-end spirits brands. Its Corporate Operations and Other segment consists of costs of corporate development, corporate finance, corporate strategy, executive management, growth, human resources, internal audit, investor relations, IT, legal and public relations.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Earnings Report Significance: Analyst Robert Ottenstein emphasizes the importance of Constellation Brands' earnings release and conference call on April 8, noting that despite challenges from macro volatility and a CEO change, the company is expected to provide positive responses to critical issues, thereby boosting market confidence.
- Attractive Valuation: Ottenstein believes that Constellation Brands' current valuation adequately discounts downside risks, and assuming the business has bottomed out, there remains room for upside appreciation, showcasing its investment appeal.
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