DA Davidson Raises Price Target on Constellation Brands (STZ) Following New Guidance and Q2 Earnings
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Price: $139.18 +2.08%
Rating Summary:
22 Buy, 15 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
Rating Summary:
22 Buy, 15 Hold, 3 Sell
Rating Trend:
Up
Today's Overall Ratings:
Up: 13 | Down: 14 | New: 11
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DA Davidson is reiterating its Buy rating on shares of Constellation Brands (NYSE: STZ) while raising its price target from $26 to $28.
The company released its Q2 results with a 49 percent increase in earnings, topping the firm's and Street's estimate substantially. The firm notes that a lower than expected tax rate added $0.05 per share to earnings which came in at $0.77 for the quarter.
Since the sale of the company's Australian and European wine business are now complete, DA Davidson highlights that the 5.3 percent increase in sales comes directly from North America.
The lower EBIT margin over the quarter, which fell 340 bps Y/Y, was largely due to an increase in ad spending and lower volumes. An analyst at the firm comments, "The total company EBIT margin is expected to be down 15%-20% year-over-year in Q3 as sales growth will be weak for wine and beer due to timing against last year. However, the Q4 should be strong."
The company raised its FY12 EPS guidance from $1.90-$2.00 to $2.00-$2.10. The increase reflects a lower share count and lower interest expense.
To go inline with market trends and the company's new guidance, DA Davidson is raising its 2012 and 2013 EPS estimate from $1.95 and $2.10 to $2.05 and $2.25.
For more ratings news on Constellation Brands click here and for the rating history of Constellation Brands click here.
Shares of Constellation Brands closed at $18.72 yesterday.
The company released its Q2 results with a 49 percent increase in earnings, topping the firm's and Street's estimate substantially. The firm notes that a lower than expected tax rate added $0.05 per share to earnings which came in at $0.77 for the quarter.
Since the sale of the company's Australian and European wine business are now complete, DA Davidson highlights that the 5.3 percent increase in sales comes directly from North America.
The lower EBIT margin over the quarter, which fell 340 bps Y/Y, was largely due to an increase in ad spending and lower volumes. An analyst at the firm comments, "The total company EBIT margin is expected to be down 15%-20% year-over-year in Q3 as sales growth will be weak for wine and beer due to timing against last year. However, the Q4 should be strong."
The company raised its FY12 EPS guidance from $1.90-$2.00 to $2.00-$2.10. The increase reflects a lower share count and lower interest expense.
To go inline with market trends and the company's new guidance, DA Davidson is raising its 2012 and 2013 EPS estimate from $1.95 and $2.10 to $2.05 and $2.25.
For more ratings news on Constellation Brands click here and for the rating history of Constellation Brands click here.
Shares of Constellation Brands closed at $18.72 yesterday.
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