Key Stats for Constellation Brands Stock
- Recent Move: -8%
- Current Price: ~$149
- Valuation Model Target: ~$229
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What Happened?
Constellation Brands (STZ) shares were among the hardest hit on Friday, plunging 8.0% to close at $149.30.
The sell-off was triggered by a “double whammy” of negative news that rattled investor confidence.
First, the company announced a surprise CEO transition, with Nicholas Fink (formerly of Fortune Brands) set to replace current CEO Bill Newlands in April 2026.
Second, the leadership change reignited fears regarding the company’s exposure to Mexico tariffs.
As the maker of Modelo and Corona, Constellation brews almost all its beer in Mexico and imports it to the US.
Recent headlines about potential trade policy shifts from the White House have investors worried that a border tax could “skyrocket” costs and wipe out profits.
The market hates uncertainty, and the combination of a new outsider CEO and a looming trade war caused a rush for the exits.
However, the underlying business fundamentals remain robust, raising the question of whether this is a structural break or a panic-induced mispricing.
See analysts’ growth forecasts and price targets for Constellation Brands stock (It’s free!) >>>
Is Constellation Brands Undervalued Today?
The TIKR Model suggests that Friday’s 8% drop was an overreaction, creating a compelling entry point for contrarian investors.
The model sees a path to $229.07, implying 53% upside from current levels.
Despite the tariff noise, the company’s core beer business continues to outperform.
In the recent Q3 earnings call, management highlighted that the beer division delivered “stronger than expected” operating margins despite volume headwinds.
CEO Bill Newlands noted: “Our portfolio gained share in 49 of the 50 states… Modelo is the #1 beer by dollars in the U.S. but still has 20% fewer points of distribution than domestic players.”
This gap suggests that even if costs rise, Constellation has a significant runway to grow volumes and leverage pricing power.
The model indicates that the market is pricing in a “worst-case” tariff scenario that ignores the brand’s immense consumer loyalty and distribution upside.
Read the full Constellation Brands Transcript on TIKR to see the Growth Strategy >>>
Valuation Deep Dive
The TIKR Advanced Valuation Model sees through the short-term political and leadership noise, focusing on the company’s long-term cash flow potential.
- Target Price: ~$229
- Current Price: ~$149
- Annualized Return: 11.2%
The “Fear” Discount: At ~$149, the stock is trading near its 52-week lows. The model’s 11.2% annualized return is driven by the continued dominance of the Modelo and Pacifico brands, which are still in the early innings of growth in many US regions.
Margin Resilience: CFO Garth Hankinson emphasized that the company has “made good progress against our cost savings initiatives,” which helps offset potential tariff headwinds. With the beer business generating massive cash flows, the company has the financial muscle to navigate trade volatility while continuing to return capital to shareholders.
Conclusion: A panic buy. With a projected 11.2% annualized return and a valuation battered by headline risk, Constellation Brands offers a rare opportunity to buy a premier consumer staple at a discount. The path to $229 depends on the new CEO executing the proven playbook, but the price you pay today offers a significant margin of safety.
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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!
