CFRA Downgrades Constellation Brands (STZ) to Buy

CFRA analyst Garrett Nelson downgraded Constellation Brands (NYSE: STZ) from Strong Buy to Buy with a price target of $275.00 (from $335.00).

The analyst comments "We lower our 12-month target to $275 from $335, based on a FY 26 (Feb.) P/E of 18.6x, a justified discount to STZ's 10-year mean forward P/E of 22.5x. We lower our adjusted EPS estimates to $13.55 from $13.80 for FY 25 and to $14.75 from $15.25 for FY 26. STZ posted Nov-Q adjusted EPS of $3.25 vs. $3.24 (+0.3%), short of the $3.31 consensus. The miss was driven by a weaker-than-expected top line, as net sales fell 0.4% to $2.46B ($70M short of consensus) and gross margin expanded 70 bps to 52.1% (10 bps above consensus). Following the slight miss, STZ lowered its FY 25 adjusted EPS guidance range to $13.40-$13.80 from $13.60-$13.80. We lower our opinion one notch to Buy. While we view STZ as a best-of-breed name in the space and like the company's prospects to continue taking market share in the domestic beer market, we see near-term headwinds facing both the sector and industry, including a challenging price/volume growth backdrop, unfavorable demographic consumption trends, and a stronger dollar."

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 $219.28 yesterday.

You May Also Be Interested In

• Baidu (BIDU) PT Lowered to $139 at Citi
• J.B. Hunt Transport Services (JBHT) PT Lowered to $171 at TD Cowen, Citing 'Light 1Q Guide'
• CFRA Upgrades Chewy Inc. (CHWY) to Strong Buy