Super Bowl LII in Minneapolis turned out to be a fantastic game between the Philadelphia Eagles and the New England Patriots. And while the teams battled it out on the field in historic high-scoring fashion, people around the country gathered in living rooms and bars happily sipping their favorite adult beverages.
The Super Bowl is one of the biggest get-together events of the year, and for many, it signals the start of post-football season life. This also means that warmer weather, as well as spring and summer parties, are on the horizon. In short, while football is over for now, people around the country will still be drinking plenty of booze.
But not all beer and liquor companies are well positioned to capitalize in the current U.S. drinking market. Domestic beer sales have slowed, wine and spirits sales are up, and imports from south of the border and craft brews have become more and more prevalent.
With that said, let’s take a look at three companies with strong Zacks Ranks that also stand to profit from these new booze trends.
1. Diageo plc DEO
Shares of Diageo plc slipped on Monday as part of a now two-day, market-wide sell-off. But before today’s retreat, shares of this liquor giant had surged more than 27% over the last year. The maker of brands such as Johnnie Walker, J&B, Smirnoff, Cîroc, Ketel One, Don Julio, and Tanqueray has also earned multiple upward earnings estimate revisions for its current fiscal year within the last 30 days.
Diageo plc is currently a Zacks Rank #2 (Buy) and rocks an “A” grade for Growth in our Style Scores system. The multinational spirits company could be poised to expand even further amid shifting drinking habits. Investors should be happy to note that the company currently sits nearly 8% below its 52-week high, which should give its shares room to rebound without having to jump into a new range.
2. Boston Beer Company SAM
Despite Boston Beer Company’s hometown Patriots losing 41-33 in the Super Bowl, the company has a stronghold in the craft beer world. In fact, the maker of Samuel Adams helped kick off the mass appeal of this beer revolution, and it continues to introduce new flavor-forward beers and other alcoholic drinks to this day.
Boston Beer also owns two hard cider powers: Twisted Tea Brewing Company and Angry Orchard Cider Company. These two brands should help the company expand its reach as the hard cider drinking trend proliferates. Lastly, Boston Beer quietly entered the even more nascent spiked sparkling water market in 2016 with its Truly Spiked & Sparkling brand. SAM is currently a Zacks Rank #1 (Strong Buy)
3. Constellation Brands, Inc. STZ
Constellation boasts beer brands such as Corona and Ballast Point. The company also owns Black Box and Kim Crawford wines as well as Casa Noble Tequila and Svedka vodka. Constellation also owns Mexican beer Modelo Especial, which is one of the fastest growing beer brands in the U.S. These brands have helped shares of this alcohol distribution powerhouse skyrocket over 44.63% in the last 52 weeks.
Looking forward, Constellation is expected to see its full-year earnings jump 26.18% year-over-year. Constellation has also experienced a great deal of upward earnings estimate revisions recently. Investors will also be happy to note that the company is expected to see its EPS figure grow at an annualized rate of 19.05% over the next three to five years. What’s more, Constellation is currently a Zacks Rank #2 (Buy).
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