Consumer goods company Constellation Brands, Inc. (NYSE:STZ) is slated to release its second quarter Fiscal 2023 results on October 6, before the market opens. The company engages in the production, marketing, and distribution of beer, wine, and spirits across the U.S.
The Street expects Constellation Brands to post adjusted earnings of $2.81 per share in Q2, meaningfully higher than the prior-year period’s figure of $2.38 per share. Meanwhile, revenue expectations are pegged at $2.51 billion, representing a year-over-year jump of 5.9% and 6.4% higher than Q1FY23 revenue of $2.36 billion.
The beverage industry is facing subdued demand owing to the inflationary trends that are squeezing consumers’ pockets. The increased cost of raw materials, brewery, transportation, and labor costs may have hampered the company’s quarterly performance. Nonetheless, STZ markets and sells some of the most preferred high-end beverages, including Modelo Especial, Corona Extra, Pacifico, and Meiomi, which continue to dominate the market.
Here’s What Analysts Expect from STZ’s Q2 Results
Ahead of Constellation Brands’ Q2 print, a few analysts lowered their price targets on the stock on the heels of reduced consumer spending sentiment. Barclays (NYSE: BCS) analyst Lauren Lieberman cut the price target on STZ stock to $272 (16% upside potential) from $284 while maintaining a Buy rating.
Lieberman’s estimates are more optimistic compared to the consensus for STZ’s Q2 results. However, her estimates lag the consensus expectations for the second half of 2023.
Similarly, Credit Suisse (NYSE: CS) analyst Kaumil Gajrawala slashed the price target on Constellation Brands stock to $277 (18.1% upside potential) from $292 and maintained a Buy rating. Gajrawala expects the company to report solid revenue figures backed by continued strength in the beer business. Meanwhile, he noted that the company still needs to improve its wine business.
Notably, Gajrawala expects corporate expenses to tick higher in the quarter. Having said that, his earnings per share (EPS) estimates for Q2 are ahead of the consensus.
Is STZ Stock a Buy?
On TipRanks, STZ stock commands a Strong Buy consensus rating. This is based on seven Buys and two Hold ratings. The average Constellation Brands price forecast of $277.75 implies 18.4% upside potential to current levels. Meanwhile, STZ stock has lost 6.3% so far this year.
Ending Thoughts
Analysts remain highly optimistic about Constellation Brands stock, though some have trimmed price targets to reflect challenging business conditions.
Also, the company engages in share buybacks and pays a quarterly dividend of $0.80 per share, implying a current yield of 1.36%. Investors may want to await the management’s details on future expectations to make informed investment decisions.
