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Constellation Brands (STZ) Dips More Than Broader Markets: What You Should Know

Zacks Equity Research
Advanced Micro Devices (AMD) closed at $30.50 in the latest trading session, marking a +0.16% move from the prior day.

In the latest trading session, Constellation Brands (STZ) closed at $203.05, marking a -0.85% move from the previous day. This change lagged the S&P 500's daily loss of 0.68%. Elsewhere, the Dow lost 0.33%, while the tech-heavy Nasdaq lost 1.46%.

Prior to today's trading, shares of the wine, liquor and beer company had gained 3.01% over the past month. This has outpaced the Consumer Staples sector's gain of 1.56% and the S&P 500's loss of 1.19% in that time.

Wall Street will be looking for positivity from STZ as it approaches its next earnings report date. The company is expected to report EPS of $2.09, down 5% from the prior-year quarter. Our most recent consensus estimate is calling for quarterly revenue of $2.06 billion, up 0.65% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.51 per share and revenue of $7.72 billion, which would represent changes of -8.3% and -4.85%, respectively, from the prior year.

Any recent changes to analyst estimates for STZ should also be noted by investors. These revisions help to show the ever-changing nature of near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive outside-audited track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection has moved 0.32% lower. STZ currently has a Zacks Rank of #3 (Hold).

Valuation is also important, so investors should note that STZ has a Forward P/E ratio of 24.08 right now. This represents a premium compared to its industry's average Forward P/E of 23.17.

We can also see that STZ currently has a PEG ratio of 2.8. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Beverages - Alcohol industry currently had an average PEG ratio of 3.21 as of yesterday's close.

The Beverages - Alcohol industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 174, putting it in the bottom 33% of all 250+ industries.

The Zacks Industry Rank includes is listed in order from best to worst in terms of the average Zacks Rank of the individual companies within each of these sectors. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow STZ in the coming trading sessions, be sure to utilize Zacks.com.


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