Evercore ISI Reiterates Outperform Rating on Constellation Brands (STZ), 'strong F1Q25'
Evercore ISI analyst Robert Ottenstein reiterated an Outperform rating and $310.00 price target on Constellation Brands (NYSE: STZ).
The analyst comments "STZ reported a strong F1Q25 (ended May 31), with beer depletions +6.4% vs. +6.0% Street and with bears looking for <5.5%, concerned about the comps. Comparable ex-Canopy EPS of $3.57 ahead of $3.46 Visible Alpha consensus, driven by upside in the beer business. Depletions for Modelo Especial remained strong, +11% over F1Q vs. +10% in FY24; 2/3-year averages at ~8%/10%, respectively. Chelada depletion growth slowed further to +5% vs. +14% in F4Q and +22% in F3Q, while Pacifico depletions of +21% remained strong vs. +22% in F4Q and +19% in F3Q. Beer shipments, which drive the P&L, came in ahead of expectations at +7.6% vs. +6.6% consensus. Beer operating margin of 40.6% came in above 39.2% consensus, with fixed cost absorption, cost savings, and marketing efficiencies / spend timing driving upside. Beer OI came in ahead at $923M vs. $890M consensus, while Wine & Spirits OI missed consensus by ~11% at $60M vs. Street $67M. Beer implied price/mix +0.7%, which is similar to trends over F2H24. Corporate expense came in at $59M, above $56M consensus."
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Shares of Constellation Brands closed at $258.94 yesterday.