Constellation Brands Crushes 3Q Estimates; Goldman Sticks To Buy

Constellation Brands reported better-than-expected results in the third quarter ending Nov. 30. In addition, its fiscal 2021 earnings guidance also came ahead of analysts’ expectations. Shares of the alcoholic beverage company closed 2.3% higher on Thursday.

Constellation Brands’ (STZ) adjusted earnings jumped 44% to $3.09 per share, beating analysts’ estimates of $2.42 per share. The company’s sales of $2.44 billion increased 22% year-over-year and exceeded the Street’s estimates of $2.23 billion.

The company’s beer depletion growth accelerated by 12% in 3Q. Meanwhile, inventory levels improved, reflecting higher organic shipments. Furthermore, the wine and spirits brands also drove solid depletion growth.

As for FY21, Constellation Brands expects to post adjusted earnings in the range of $9.80 to $10.05 per share, compared to analysts’ estimates of $9.50 per share. Moreover, the company announced a $2 billion share repurchase plan. (See STZ stock analysis on TipRanks)

Commenting on the financial results, Goldman Sachs analyst Bonnie Herzog reiterated a Buy rating on the stock. Herzog said that robust beer shipment and depletion volume growth helped the company deliver “strong” and upbeat earnings. The analyst views the new share buyback program as a key positive catalyst.

Overall, consensus among analysts is a Moderate Buy with 9 analysts assigning a Buy, 3 suggesting a Hold, and 1 analyst has a Sell rating. The average price target of $228.17 suggests that the shares are fully priced at current levels. Shares have appreciated 22.3% over the past year.

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