Constellation Brands (STZ) Stock Forecast & Price Target

Constellation Brands has demonstrated resilience and growth prospects in the beer category, evidenced by market share gains across 49 of 50 states and an impressive revenue diversification strategy focused primarily on its Mexican beer brands. The company anticipates modest volume growth and projected beer operating margin expansion of 50 basis points, signaling operational efficiency and profitability improvement despite macroeconomic headwinds. Additionally, positive sentiment among the core Hispanic consumer base is expected to enhance drinking occasions, ultimately contributing to increased revenue and earnings per share (EPS) growth.

Constellation Brands has significantly lowered its financial guidance, projecting a decline in beer net sales growth of -4% to -2%, alongside a concerning drop in consolidated net sales of -6% to -4%. The company anticipates a sharp decline in beer operating income, with estimates ranging from -9% to -7%, and a contraction in operating margins by approximately 330 basis points due to volume deleverage and tariffs. Additionally, ongoing weakness in beer volumes is evidenced by reported depletions expected to decline by 4% in future quarters, reinforcing an overall negative outlook for the company's performance.