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

Zacks Equity Research

In the latest trading session, Constellation Brands (STZ) closed at $208.19, marking a +0.7% move from the previous day. This change outpaced the S&P 500's 0.03% gain on the day. Meanwhile, the Dow gained 0.28%, and the Nasdaq, a tech-heavy index, lost 0.04%.

Heading into today, shares of the wine, liquor and beer company had gained 7.08% over the past month, outpacing the Consumer Staples sector's gain of 1.41% and the S&P 500's gain of 2.25% in that time.

STZ will be looking to display strength as it nears its next earnings release, which is expected to be October 3, 2019. On that day, STZ is projected to report earnings of $2.62 per share, which would represent a year-over-year decline of 8.71%. Our most recent consensus estimate is calling for quarterly revenue of $2.33 billion, up 1.42% from the year-ago period.

For the full year, our Zacks Consensus Estimates are projecting earnings of $8.35 per share and revenue of $7.90 billion, which would represent changes of -10.02% and -2.61%, respectively, from the prior year.

Investors should also note any recent changes to analyst estimates for STZ. Recent revisions tend to reflect the latest 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. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, 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 0.18% lower. STZ is currently a Zacks Rank #3 (Hold).

In terms of valuation, STZ is currently trading at a Forward P/E ratio of 24.76. This valuation marks a premium compared to its industry's average Forward P/E of 24.73.

Meanwhile, STZ's PEG ratio is currently 3.1. 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. STZ's industry had an average PEG ratio of 3.37 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 185, which puts it in the bottom 28% 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.

You can find more information on all of these metrics, and much more, on Zacks.com.


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