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Constellation Brands' earnings miss, Palantir wins major army contract, NFLX closes at all-time high

Yahoo Finance's Brian Sozzi and Julie Hyman break down the morning's top stock movers including Netflix, Constellation Brands, and Palantir.

Video Transcript

JULIE HYMAN: This is "Yahoo Finance Live" as we are taking a look at some movers this morning. This is one that we have heard Brian Sozzi teasing ahead to all morning long. Constellation Brands coming out, missing estimates on the bottom line, beating on the top line. But the company is also raising its full-year profit forecasts that you-- Brian, you're watching those margins.

BRIAN SOZZI: I'm digging in here, Julie. I'm digging in here to Constellation Brands. Interesting quarter one. They missed by over $0.30, as we just mentioned here. So that is not the norm for a company that sells consumer staples. And I would put beer and wine as a consumer staple. We don't normally see that, especially stacked up alongside what we saw PepsiCo yesterday really beat big.

But sales in the beer business, they were up 14%. But operating margins, they were down 530 basis points, or BPs as they would say on Wall Street. And interesting, besides them noting higher cost in the beer business, they wrote down, it appears, $66 million of hard seltzer. Now we've seen write-downs slam the likes of Sam Adams. They've been writing hard seltzer off in recent quarters here because of the slowdown in the hard seltzer market here. So that slowdown, which Constellation acknowledged, appears to have hit them in the most recent quarter as well.

And then, also, profit margins in the wine business down 620 basis points. And, you know, if we're looking for a silver lining in this quarter, Constellation did come out, raised its full-year fiscal year guidance compared to what they saw a couple of months ago. So interesting to see an earnings miss, but a full-year raise. And for them, it looks to be bullishness around their beer business.

Also worth noting here, too, companies saying their stock is undervalued. I have not necessarily heard that from Constellation before on their earnings release. So far year-to-date, they're putting their money where their mouth is. They've repurchased a little more than $1.3 billion of their stock, Julie.

JULIE HYMAN: And I'm reminded when you talk about the strength in the beer business of the analysts we recently spoke to said Constellation was a top pick within the beverage industry. And this thesis had a lot to do with strength of demand for beer. So that part is being borne out, even if the margins are proving a little bit tricky here.

Another stock that we're watching this morning that really stood out to us because it's going against the tide, if you will, is Palantir. And that's because it's up, and most of the rest of tech is down. And not only is it up, it's up quite a bit. The company won a big contract. It's part of most of an $823 million program to provide data and analysis software to the Army.

Now Palantir, as we know, gets a lot of military-- a lot of its revenue from the military. So won out on this particular bid out of six companies who originally submitted proposals. So, you know, it-- I think it goes to show, perhaps, that even in this market, execution matters, Brian. You know, if you win a contract, if you, you know, have good earnings, for example, even if there is sort of this overall negative sentiment, it helps.

BRIAN SOZZI: Yeah, it doesn't hurt, Julie. And there we are coming up against the opening bell here on Wall Street, which could be a volatile-- a volatile session here. Tuesday was a bull market. And today, maybe a bear market. Who knows? There is the opening bell on Wall Street. We see Regal Rexnord corporation ringing that bell to commemorate the completion of their merger. And, of course, our around the bell coverage was brought to you by PIMCO.

Julie, it is-- it is interesting on Palantir. Every story that I continue reading this company, they are this secretive company. And I think that does reflect a large part in the stock. I mean, by and large, this year, Palantir shares have done nothing. And I think investors continue to have trouble understanding truly what they do and how that will lead-- or how that will shape their earnings power over the next decade.

JULIE HYMAN: Yes, most definitely. Let's talk about another mover that you have been watching, and that is Netflix. The stock, I'm guessing it's down today. I actually have not looked at it in the last little bit here. Yep, it's not down much, though. But with what caught your eye about Netflix, Soz?

BRIAN SOZZI: Yeah, well, here's my positive spin on Netflix. I know you've been taking me to task for my general bearishness or downbeat mood here on market and stocks. But it is relatively outperforming many others in big cap tech today, which are getting slammed because of the rise in yields. And, really, yesterday, Netflix shares closed at an all time high, a record high close for Netflix, really, as momentum returns to this name ahead of the company's earnings on a few weeks. Over the past 48 hours, Netflix shares have been in the top three trending tickers on the Yahoo Finance platform here. So it wouldn't be shocking, Julie, if Netflix goes green. Would not be shocking to me at all.

JULIE HYMAN: I mean, it wouldn't be shocking the whole market went green for that matter.

BRIAN SOZZI: It could.

JULIE HYMAN: But, you know, we'll see what happens.

BRIAN SOZZI: It could.

JULIE HYMAN: Well, we'll see what happens with Netflix in particular.