Key Stats for Constellation Brands Stock
- 1-year price change for Constellation Brands stock Today: -17%
- $STZ Share Price as of Mar. 20: $150
- 52-Week High: $197
- $STZ Stock Price Target: $172
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What Happened?
Constellation Brands (STZ) stock got a lift on Wednesday after Citi upgraded the Corona and Modelo maker from Neutral to Buy.
The firm raised its price target to $175 from $155, implying about 16% upside from current levels.
The upgrade comes after a tough stretch for the stock, which is sitting well below its 52-week high.
Citi’s core argument is simple.
- Constellation Brands stock is trading below its historical valuation levels, and the business may be closer to a turning point than the market currently believes.
- The firm expects beer volumes to start recovering in Q4, helped by easier year-over-year comparisons and improving scanner data at retail.
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What the Market Is Telling Us About Constellation Brands Stock
The beer business has been under real pressure.
- Hispanic consumers, a key customer base for Modelo and Corona, have pulled back on spending due to economic and immigration-related concerns.
- That has weighed on depletions, which have been negative for four straight quarters.
Citi now expects that streak to end.
- The firm is forecasting a return to positive depletions in Q4 and projects roughly 0.9% depletion growth over the following four quarters.
- The FIFA World Cup in June and July is one potential catalyst.
- Beer and soccer over-index with Hispanic consumers, which maps directly to Constellation’s portfolio.
- On margins, Citi thinks the company’s own Q4 guidance looks conservative.
- That sets up a possible beat. The firm also noted that analyst consensus has already drifted below Constellation’s own medium-term margin targets, meaning expectations may be too low.
Constellation Brands stock has a lot of ground to recover.
The company still has a strong brand portfolio.
- Modelo is the number one beer by dollar sales in the U.S.
- Pacifico is growing fast, especially in California.
- Both brands have a real long-term distribution runway.
For investors willing to look past the near-term noise, Constellation Brands stock may be offering an entry point that doesn’t come around often.
Citi’s upgrade suggests the risk-reward is starting to tilt in favor of buyers.
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How Much Upside Does Constellation Brands Stock Have From Here?
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Disclaimer:
Please note that the articles on TIKR are not intended to serve as investment or financial advice from TIKR or our content team, nor are they recommendations to buy or sell any stocks. We create our content based on TIKR Terminal’s investment data and analysts’ estimates. Our analysis might not include recent company news or important updates. TIKR has no position in any stocks mentioned. Thank you for reading, and happy investing!
