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Constellation Brands (STZ) Gains As Market Dips: What You Should Know

Zacks Equity Research

Constellation Brands (STZ) closed the most recent trading day at $175.73, moving +0.52% from the previous trading session. This move outpaced the S&P 500's daily loss of 0.34%. Elsewhere, the Dow gained 0.05%, while the tech-heavy Nasdaq lost 0.69%.

Wall Street will be looking for positivity from STZ as it approaches its next earnings report date. This is expected to be July 1, 2020. On that day, STZ is projected to report earnings of $1.84 per share, which would represent a year-over-year decline of 16.74%. Our most recent consensus estimate is calling for quarterly revenue of $1.98 billion, down 5.62% from the year-ago period.

STZ's full-year Zacks Consensus Estimates are calling for earnings of $8.22 per share and revenue of $7.68 billion. These results would represent year-over-year changes of -9.87% and -7.94%, respectively.

Investors might also notice recent changes to analyst estimates for STZ. These recent revisions tend to reflect the evolving nature of short-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Research indicates that these estimate revisions are directly correlated with near-term share price momentum. 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 4.56% higher within the past month. STZ currently has a Zacks Rank of #2 (Buy).

In terms of valuation, STZ is currently trading at a Forward P/E ratio of 21.26. For comparison, its industry has an average Forward P/E of 29.38, which means STZ is trading at a discount to the group.

Also, we should mention that STZ has a PEG ratio of 13.99. This popular metric is similar to the widely-known P/E ratio, with the difference being that the PEG ratio also takes into account the company's expected earnings growth rate. The Beverages - Alcohol industry currently had an average PEG ratio of 4.72 as of yesterday's close.

The Beverages - Alcohol industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 68, which puts it in the top 27% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

Be sure to follow all of these stock-moving metrics, and many more, on Zacks.com.

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