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Constellation Brands News: Why STZ Stock Is Sliding Lower Today

William White

Constellation Brands news for Friday has STZ stock on its way down.

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Constellation Brands (NYSE:STZ) is the target of a downgrade from Morgan Stanley analyst Dara Mohsenian. This has Mohsenian dropping STZ stock from its previous rating of “Overweight” to a new rating of “Equal Weight.”

This isn’t the only bad bit of Constellation Brands news from the Morgan Stanley analyst. There’s also a new price target to go with the downgrade. This new price target from Mohsenian is sitting at $220. That’s $10 lower than the old price target.

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The new price target for Constellation Brands is a 4% drop from its previous price target. Despite this, it is still roughly 7% above the closing price for STZ stock on Thursday.

So why exactly is Mohsenian dropping his rating for STZ stock? The analyst says that he no longer sees the same potential in the company as before. That’s bad Constellation Brands news coming from him. Mohsenian was previously giving the stock a strong recommendation and it’s the best performer that he has covered, reports Barron’s.

“Near term, we also see limited potential for beer margin upside in FY20 (we are essentially in-line with STZ’s flat beer margin forecast at +4 bps), and with subpar weather and just OK results (based on scanner data and industry feedback) so far in fiscal Q1, we see some modest risk to our 8% Q1 beer depletion forecast,” Morgan Stanley says in a note obtained by Seeking Alpha.

STZ stock was down 4% as of noon Friday, but is up 25% since the start of the year.

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As of this writing, William White did not hold a position in any of the aforementioned securities.

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