Constellation Brands (STZ) Stock Forecast & Price Target

Constellation Brands has demonstrated solid growth in market share, gaining in volume share in 49 of 50 states while experiencing a notable recovery in the beer category, driven by innovative products like Corona Sunbrew and Corona N/A. The company continues to focus on operational execution, which is expected to yield modest volume growth and beer operating margin expansion, projected at 38.3% in 2027. Additionally, improving sentiment among core Hispanic consumers is anticipated to increase drinking occasions, further boosting revenue and earnings per share.

Constellation Brands has issued significantly lowered guidance for its key beer segment, projecting a net sales growth decline of 4% to 2%, coupled with a 17% to 20% decrease in wine and spirits net sales. Consolidated net sales are expected to experience a contraction of 6% to 4%, alongside a drop in beer operating income of 9% to 7%, reflecting challenges in maintaining profitability amidst declining volumes and increased tariffs. Furthermore, the company anticipates a 330 basis point contraction in operating margin due to volume deleverage, contributing to a negative outlook on future earnings performance.