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

Zacks Equity Research

Constellation Brands (STZ) closed at $182.82 in the latest trading session, marking a -0.65% move from the prior day. This change lagged the S&P 500's 0.08% gain on the day. At the same time, the Dow lost 0.01%, and the tech-heavy Nasdaq lost 0.04%.

Heading into today, shares of the wine, liquor and beer company had lost 7.29% over the past month, lagging the Consumer Staples sector's loss of 0.51% and the S&P 500's gain of 4.35% in that time.

Wall Street will be looking for positivity from STZ as it approaches its next earnings report date. In that report, analysts expect STZ to post earnings of $1.94 per share. This would mark a year-over-year decline of 18.14%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.95 billion, down 1.2% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.45 per share and revenue of $8.05 billion. These totals would mark changes of -8.94% and -0.86%, respectively, from last year.

It is also important to note the recent changes to analyst estimates for STZ. These revisions typically reflect the latest short-term business trends, which can change frequently. 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. 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. Within the past 30 days, our consensus EPS projection has moved 0.03% lower. STZ currently has a Zacks Rank of #3 (Hold).

Investors should also note STZ's current valuation metrics, including its Forward P/E ratio of 21.77. This represents a discount compared to its industry's average Forward P/E of 23.04.

Also, we should mention that STZ has a PEG ratio of 2.76. 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 was holding an average PEG ratio of 3.44 at yesterday's closing price.

The Beverages - Alcohol industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 183, putting it in the bottom 29% 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.

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


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