Constellation Brands (STZ) PT Raised to $262 at Deutsche Bank, 'We suspect wine & spirits will lag longer-term aspirations'

Deutsche Bank analyst Steve Powers raised the price target on Constellation Brands (NYSE: STZ) to $262.00 (from $256.00) while maintaining a Hold rating.

The analyst comments "Given likely headwinds to consumption from less favorable weather in January/ February, we tweak our beer shipments/depletions forecasts lower ahead of fiscal 4Q earnings next week, though we see potential offsets on margin from greater productivity and a more manageable cost environment. In wine & spirits, we similarly lower our estimates, given lingering category softness. Looking to FY25, we expect STZ to guide to on on-algorithm year in beer, with trends aided by incremental shelf space wins and improved velocity on shelf assuming more conducive weather. We suspect wine & spirits will lag longer-term aspirations, though we note investor expectations for this business are already quite low. Altogether, better beer profitability assumptions and a roll forward in time lead our price target higher to $262 (up from $256), but we remain Hold rated."

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