Constellation Brands (STZ) AI Stock Analysis

• Market Cap: $33.25B
• Dividend Yield: 2.17%
• Average Volume (3M): 2.04M
• Price to Earnings (P/E): 49.1
• Beta (1Y): 0.44
• Revenue Growth: 2.47%
• EPS Growth: -105.09%
• Country: US
• Employees: 10,600
• Sector: Consumer Defensive
• Sector Strength: 67
• Industry: Beverages - Wineries & Distilleries
• EPS (TTM): 2.63
• Shares Outstanding: 177,993,030
• 10 Day Avg. Volume: 1,411,517
• 30 Day Avg. Volume: 2,035,470
• PEG Ratio: 3.73
• Price to Book (P/B): 4.97
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 17.46
• Enterprise Value/Market Cap: 1.38
• Enterprise Value/Revenue: 1.13
• Enterprise Value/Gross Profit: 8.66
• Enterprise Value/Ebitda: 5.92
• 1Y Price Target: $208.11
• Price Target Upside: 6.38% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 18

Constellation Brands scores a 65, reflecting strong revenue growth and cash flow, but challenges with profitability and valuation concerns. Positive momentum in technical indicators is tempered by potential overvaluation and macroeconomic risks. Strategic initiatives and shareholder-focused actions are promising, but revised forecasts and economic uncertainties pose risks.

Positive Factors

Earnings

STZ closed out its fiscal year beating expectations on both the top and bottom lines and delivered FY25 EPS at the high-end of their updated guidance range.

Valuation

Current valuation of Constellation Brands is at the low end of its historical range.

Negative Factors

Divestitures

The sale of Svedka and 2025 Wine will result in a significant reduction in gross profit for the company in the coming fiscal year.

Sales Growth

Management lowered its multi-year (FY26-28) sales outlook notably below historical growth, citing the tough macro environment.

Constellation Brands Business Overview & Revenue Model

Company Description

Constellation Brands, Inc., together with its subsidiaries, produces, imports, markets, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. It provides beer primarily under the Corona Extra, Corona Premier, Corona Familiar, Corona Light, Corona Refresca, Corona Hard Seltzer, Modelo Especial, Modelo Negra, Modelo Chelada, Pacifico, and Victoria brands. The company offers wine under the 7 Moons, Cook's California Champagne, Cooper & Thief, Crafters Union, Kim Crawford, Meiomi, Mount Veeder, Ruffino, SIMI, The Dreaming Tree, Charles Smith, The Prisoner Wine Company, Robert Mondavi, My Favorite Neighbor, and Schrader; and spirits under the Casa Noble, Copper & Kings, High West, Mi CAMPO, Nelson's Green Brier, and SVEDKA brands. It provides its products to wholesale distributors, retailers, on-premise locations, and state alcohol beverage control agencies. Constellation Brands, Inc. was founded in 1945 and is headquartered in Victor, New York.

How the Company Makes Money

Constellation Brands primarily generates revenue through the sale of its alcoholic beverage products across various segments, including beer, wine, and spirits. The beer segment is a significant revenue driver, particularly through the sale of its popular imported Mexican beer brands like Corona and Modelo. The company's wine and spirits segment also contributes to its revenue through a diverse array of premium and super-premium products. Additionally, strategic partnerships and acquisitions have bolstered its product offerings and market presence. Constellation Brands capitalizes on its strong distribution network and marketing strategies to ensure widespread availability and visibility of its products, further enhancing its revenue potential.

Constellation Brands Financial Statement Overview

Summary

Constellation Brands demonstrates strong revenue growth and robust cash flow management, though it faces challenges with profitability. The balance sheet is stable, with moderate leverage, yet negative profitability impacts return metrics. Improving profitability will be key for financial health enhancement.

Income Statement

Constellation Brands has shown consistent revenue growth over the years, achieving a 2.50% increase in the latest annual period. However, the company experienced a significant decline in profitability, with a negative net income for the most recent year, resulting in a net profit margin of -0.80%. The gross profit margin remains healthy at 52.06%, indicating strong product markups, but EBIT margin has decreased significantly. Overall, while revenue growth is a positive sign, the declining profitability is a concern.

Balance Sheet

The company's balance sheet reflects a moderate debt-to-equity ratio of 0.12, indicating manageable leverage levels relative to equity. The return on equity is currently negative due to the net loss, which highlights potential inefficiencies in generating returns for shareholders. The equity ratio stands at 31.78%, suggesting a balanced asset financing structure. While the balance sheet is relatively stable, the negative profitability impacts the overall strength.

Cash Flow

Constellation Brands has demonstrated robust cash flow management, with a notable free cash flow growth of 28.31% in the latest period. The operating cash flow to net income ratio is exceptionally high due to the low or negative net income, indicating strong cash flow generation relative to earnings. The free cash flow to net income ratio is also strong. Overall, despite the earnings challenges, the company's cash flow position is a bright spot.

Breakdown
Mar 2025	Mar 2024	Mar 2023	Mar 2022	Mar 2021
Income Statement		Total Revenue
10.21B	9.96B	9.45B	8.82B	8.61B
	Gross Profit
5.31B	5.02B	4.77B	4.71B	4.47B
	EBIT
354.90M	3.17B	2.84B	2.33B	2.79B
	EBITDA
774.30M	3.08B	1.26B	1.09B	3.31B
	Net Income Common Stockholders
-81.40M	1.73B	-38.50M	1.00M	2.00B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
68.10M	152.40M	133.50M	199.40M	460.60M
	Total Assets
21.65B	25.69B	24.66B	25.86B	27.10B
	Total Debt
12.11B	12.56B	12.46B	10.42B	10.44B
	Net Debt
12.05B	12.41B	12.33B	10.22B	9.98B
	Total Liabilities
14.52B	15.63B	15.93B	13.81B	13.18B
	Stockholders Equity
6.88B	9.74B	8.41B	11.73B	13.60B
Cash Flow		Free Cash Flow
1.94B	1.51B	1.72B	1.68B	1.94B
	Operating Cash Flow
3.15B	2.78B	2.76B	2.71B	2.81B
	Investing Cash Flow
-974.80M	-1.29B	-999.40M	-1.04B	-87.90M
	Financing Cash Flow
-2.26B	-1.47B	-1.82B	-1.93B	-2.35B

Constellation Brands Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 195.62
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For STZ, the sentiment is Positive. The current price of 195.62 is above the 20-day moving average (MA) of 187.33, above the 50-day MA of 183.40, and below the 200-day MA of 211.94, indicating a neutral trend. The MACD of 1.92 indicates Positive momentum. The RSI at 59.83 is Neutral, neither overbought nor oversold. The STOCH value of 49.47 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for STZ.

Constellation Brands Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABEV	80 Outperform	$39.46B	15.58	15.09%	4.92%	1.25%	-13.02%
CCU	72 Outperform	$2.70B	15.46	11.33%	1.89%	6.18%	61.39%
DEO	72 Outperform	$62.78B	17.41	35.83%	3.57%	-1.21%	-8.89%
SAM	70 Outperform	$2.65B	40.58	7.36%	―	0.79%	-24.27%
STZ	65 Neutral	$33.25B	49.10	-0.98%	2.17%	2.47%	-105.09%
Sector *	64 Neutral	$8.59B	14.59	4.82%	173.89%	3.27%	2.73%
TAP	64 Neutral	$11.22B	11.16	7.90%	3.18%	-5.17%	-0.74%

Constellation Brands Corporate Events

Constellation Brands Secures $500M Term Loan Agreement

On May 9, 2025, Constellation Brands entered into a Term Loan Credit Agreement with Bank of America and other lenders, allowing for a $500 million loan to be drawn in up to two parts. The company plans to use the funds for general corporate purposes, including debt repayment. The agreement includes various covenants and conditions similar to its existing credit facilities, and it is set to mature two years after the initial borrowing. This financial maneuver is expected to provide Constellation Brands with increased flexibility in managing its financial commitments and strategic initiatives.

Spark’s Take on STZ Stock

According to Spark, TipRanks’ AI Analyst, STZ is a Neutral.

Constellation Brands’ strong revenue growth and cash flow are offset by profitability challenges and potential overvaluation concerns. Strategic initiatives and shareholder-focused actions are promising, but macroeconomic uncertainties and revised sales forecasts pose risks.

To see Spark’s full report on STZ stock, click here.

Constellation Brands Announces $500M Senior Notes Offering

On April 29, 2025, Constellation Brands announced the pricing of a public offering of $500 million in senior notes due in 2030, with a 4.800% interest rate. The proceeds from this offering, expected to close on May 1, 2025, will be used for general corporate purposes, including debt repayment and capital expenditures, potentially impacting the company’s financial flexibility and market position.

Spark’s Take on STZ Stock

According to Spark, TipRanks’ AI Analyst, STZ is a Neutral.

Constellation Brands’ strong revenue growth and cash flow are offset by profitability challenges and potential overvaluation concerns. Strategic initiatives and shareholder-focused actions are promising, but macroeconomic uncertainties and revised sales forecasts pose risks.

To see Spark’s full report on STZ stock, click here.

Constellation Brands Appoints New Chief HR Officer

On April 14, 2025, Constellation Brands announced the appointment of Paula Erickson as the new Executive Vice President and Chief Human Resources Officer, effective April 21, 2025. Erickson, an industry veteran, will replace K. Kristann Carey, who will step down and leave the company in May 2025. Erickson’s extensive experience in talent strategy and organizational transformation is expected to enhance Constellation’s HR function and support its growth objectives.

Spark’s Take on STZ Stock

According to Spark, TipRanks’ AI Analyst, STZ is a Neutral.

Constellation Brands exhibits a solid financial foundation with strong revenue growth and improved profitability, but faces challenges with margin pressures and cash flow management. While the beer segment shows resilience, the wine and spirits segment struggles. Technical indicators suggest mixed momentum, and the high P/E ratio points to potential overvaluation. Strategic initiatives like capital returns provide support, but overall, caution is advised due to valuation concerns and segment-specific challenges.

To see Spark’s full report on STZ stock, click here.

Constellation Brands Divests Wine Brands to Focus Growth

On April 9, 2025, Constellation Brands announced the signing of an agreement with The Wine Group to divest and license trademarks of its remaining mainstream wine brands, including Woodbridge and Robert Mondavi Private Selection. This move is part of the company’s strategic initiatives to focus on higher growth segments and is expected to close after the fiscal quarter ending May 31, 2025. Additionally, Constellation declared a quarterly cash dividend and authorized a $4 billion share repurchase program, reflecting its commitment to returning value to shareholders. The company reported fiscal 2025 financial highlights, including a 5% net sales growth in its beer business and significant operating cash flow, despite a challenging consumer demand environment.

Spark’s Take on STZ Stock

According to Spark, TipRanks’ AI Analyst, STZ is a Neutral.

Constellation Brands exhibits a solid financial foundation with strong revenue growth and improved profitability, but faces challenges with margin pressures and cash flow management. While the beer segment shows resilience, the wine and spirits segment struggles. Technical indicators suggest mixed momentum, and the high P/E ratio points to potential overvaluation. Strategic initiatives like capital returns provide support, but overall, caution is advised due to valuation concerns and segment-specific challenges.

To see Spark’s full report on STZ stock, click here.

Constellation Brands Announces Executive Leadership Change

On February 18, 2025, Constellation Brands announced the departure of E. Yuri Hermida, Executive Vice President, Chief Growth & Strategy Officer, effective February 28, 2025. Mallika Monteiro, Executive Vice President, Managing Director – Beer Brands, will temporarily assume his responsibilities in addition to her current role. The transition reflects Constellation’s commitment to maintaining its strategic growth as it progresses towards long-term aspirations.