Constellation Brands (STZ) Could See a Windfall from BUD/Modelo Deal
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Price: $261.71 +0.06%
Rating Summary:
27 Buy, 10 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
Rating Summary:
27 Buy, 10 Hold, 1 Sell
Rating Trend: = Flat
Today's Overall Ratings:
Up: 11 | Down: 12 | New: 13
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Shares of Constellation Brands Inc. (NYSE: STZ) have been moving higher over the past few sessions as a Anheuser-Busch InBev deal to acquire the rest of Grupo Modelo could trigger an end of the Modelo/STZ Crown Imports joint venture and a potential windfall for STZ.
Going through the JV contract language, analysts at Goldman Sachs, note that a ABI takeover of Modelo would potentially trigger a 'change of control." This would result in Constellation Brands receiving a payment of 8X its portion of 2016E Crown Imports EBIT.
Based on this, Goldman is valuing the beer business for STZ at a minimum of $8/share. This compares to a worst-case scenario of $3.60/share.
Goldman is maintaining their Buy rating and $22 price target on Constellation Brands.
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 $21.86 yesterday.
Going through the JV contract language, analysts at Goldman Sachs, note that a ABI takeover of Modelo would potentially trigger a 'change of control." This would result in Constellation Brands receiving a payment of 8X its portion of 2016E Crown Imports EBIT.
Based on this, Goldman is valuing the beer business for STZ at a minimum of $8/share. This compares to a worst-case scenario of $3.60/share.
Goldman is maintaining their Buy rating and $22 price target on Constellation Brands.
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 $21.86 yesterday.
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