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

Zacks Equity Research

Constellation Brands (STZ) closed the most recent trading day at $163.01, moving -0.45% from the previous trading session. This move lagged the S&P 500's daily gain of 0.9%. At the same time, the Dow added 0.56%, and the tech-heavy Nasdaq gained 1.13%.

Prior to today's trading, shares of the wine, liquor and beer company had gained 15.11% over the past month. This has outpaced the Consumer Staples sector's gain of 4.25% and the S&P 500's gain of 14.3% in that time.

STZ will be looking to display strength as it nears its next earnings release. In that report, analysts expect STZ to post earnings of $1.87 per share. This would mark a year-over-year decline of 15.38%. Meanwhile, our latest consensus estimate is calling for revenue of $2.07 billion, down 1.28% from the prior-year quarter.

For the full year, our Zacks Consensus Estimates are projecting earnings of $7.86 per share and revenue of $7.78 billion, which would represent changes of -13.82% and -6.71%, respectively, from the prior year.

It is also important to note the recent changes to analyst estimates for STZ. These revisions help to show the ever-changing nature of near-term business trends. With this in mind, we can consider positive estimate revisions a sign of optimism about the company's business outlook.

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. Over the past month, the Zacks Consensus EPS estimate has moved 3.3% lower. STZ is currently a Zacks Rank #3 (Hold).

Looking at its valuation, STZ is holding a Forward P/E ratio of 20.82. This valuation marks a discount compared to its industry's average Forward P/E of 24.76.

Also, we should mention that STZ has a PEG ratio of 13.7. 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 3.94 based on yesterday's closing prices.

The Beverages - Alcohol industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 162, which puts it in the bottom 37% 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.

Make sure to utilize Zacks. Com to follow all of these stock-moving metrics, and more, in the coming trading sessions.

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