UPDATE: Constellation Brands (STZ) PT Raised to $275 at BofA Securities After Looking at Potential Wine Divestitures

BofA Securities analyst Bryan Spillane raised the price target on Constellation Brands (NYSE: STZ) to $275.00 (from $255.00) after Duckhorn (NAPA) and Vintage Wine Estates SPAC (VWE) came public creating a market view on wine company valuations. STZ announced a strategic review of its Wine & Spirits (W&S) business in late FY18 / early FY19 including divestitures of several lower-price point brands and now there are pure play domestic public comps to better value the opportunity.

The analyst reiterated a Buy rating, stating "Given there are now pure play domestic public comps, we update our thoughts around potential value unlock for STZ's remain-co W&S business. Going forward we think two factors bear consideration: 1) Peer valuation multiples following the performance of the NAPA IPO, 2) Other food and beverage companies have pursued value creation via strategic alternatives including tax free spin (Lamb Weston, Mead Johnson) and partial IPO (Bellring Brands)."

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