Constellation Brands (STZ) Gains But Lags Market: What You Should Know
In the latest trading session, Constellation Brands (STZ) closed at $215.82, marking a +1.02% move from the previous day. The stock lagged the S&P 500's daily gain of 1.86%. Meanwhile, the Dow gained 1.79%, and the Nasdaq, a tech-heavy index, added 0.3%.
Coming into today, shares of the wine, liquor and beer company had lost 9.34% in the past month. In that same time, the Consumer Staples sector lost 2.59%, while the S&P 500 lost 5.05%.
Constellation Brands will be looking to display strength as it nears its next earnings release. The company is expected to report EPS of $2.16, up 18.68% from the prior-year quarter. Meanwhile, our latest consensus estimate is calling for revenue of $2.02 billion, up 3.41% from the prior-year quarter.
It is also important to note the recent changes to analyst estimates for Constellation Brands. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.
Our research shows that these estimate changes are directly correlated with near-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes these estimate changes into account and delivers a clear, actionable rating model.
The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. The Zacks Consensus EPS estimate has moved 0.26% lower within the past month. Constellation Brands currently has a Zacks Rank of #4 (Sell).
Digging into valuation, Constellation Brands currently has a Forward P/E ratio of 18.54. Its industry sports an average Forward P/E of 23.84, so we one might conclude that Constellation Brands is trading at a discount comparatively.
Also, we should mention that STZ has a PEG ratio of 2.07. 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 was holding an average PEG ratio of 2.07 at yesterday's closing price.
The Beverages - Alcohol industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 222, putting it in the bottom 13% 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.
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