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Constellation Brands (STZ) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Constellation Brands (STZ) closed the most recent trading day at $194.42, moving +0.55% from the previous trading session. This move outpaced the S&P 500's daily gain of 0.25%. Elsewhere, the Dow gained 0.39%, while the tech-heavy Nasdaq lost 0.09%.

Heading into today, shares of the wine, liquor and beer company had lost 3.02% over the past month, lagging the Consumer Staples sector's loss of 1.65% and outpacing the S&P 500's loss of 5.58% in that time.

Investors will be hoping for strength from STZ as it approaches its next earnings release. On that day, STZ is projected to report earnings of $2.63 per share, which would represent a year-over-year decline of 8.36%. Our most recent consensus estimate is calling for quarterly revenue of $2.33 billion, up 1.42% from the year-ago period.

STZ's full-year Zacks Consensus Estimates are calling for earnings of $8.36 per share and revenue of $7.90 billion. These results would represent year-over-year changes of -9.91% and -2.61%, respectively.

Investors should also note any recent changes to analyst estimates for STZ. 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. The Zacks Consensus EPS estimate remained stagnant within the past month. STZ is currently a Zacks Rank #4 (Sell).

Looking at its valuation, STZ is holding a Forward P/E ratio of 23.12. For comparison, its industry has an average Forward P/E of 23.12, which means STZ is trading at a no noticeable deviation to the group.

Investors should also note that STZ has a PEG ratio of 2.9 right now. 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. Beverages - Alcohol stocks are, on average, holding a PEG ratio of 2.99 based on yesterday's closing prices.

The Beverages - Alcohol industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 176, putting it in the bottom 32% 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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