BofA Securities Downgrades Constellation Brands (STZ) to Underperform

BofA Securities analyst Peter Galbo downgraded Constellation Brands (NYSE: STZ) from Neutral to Underperform with a price target of $150.00 (from $182.00).

The analyst comments "We downgrade Constellation Brands (STZ) shares from Neutral to Underperform and lower our PO from $182 to $150, now based on 11.5x our revised CY26E EPS (prior 13x). Despite shares down 26% YTD, we see further downside potential as beer industry consumption remains soft creating risk to sales, margin and multiple. Added risks: 1) core Hispanic demographic remains pressured 2) longer term alcohol consumption trends (Exhibits 12-14), & 3) continued capacity buildout in Mexico (Exhibit 9). We believe consensus has become complacent and argument of “valuation is cheap” is unwarranted given multiple premium STZ maintains versus TAP despite STZ being a largely landlocked US business. Our new target multiple of 11.5x places STZ at 2x premium to TAP, but 2x discount to global beer peers. FY26-FY28E EPS moves to $12.60 (low end of outlook), $13.50 & $13.90."

For an analyst ratings summary and ratings history on Constellation Brands click here. For more ratings news on Constellation Brands click here.

Shares of Constellation Brands closed at $163.68 yesterday.

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