Constellation Brands (STZ) Stock Forecast & Price Target

Constellation Brands has shown improvements in scanner volumes, with segment operating margins rising to 15.8%, indicating operational efficiency and potential for further profitability. The beer category is signaling a notable reacceleration, which, coupled with market share gains, positions the company to potentially exit the fiscal year with positive momentum. Looking ahead, modest volume growth is anticipated through 2027, potentially leading to further expansion in beer operating margins, which could align closer with medium-term targets.

Constellation Brands is experiencing a negative trend in its core beer business, as evidenced by a 3.0% decline in beer depletions, which surpassed expectations and indicates potential market share loss. The company is now forecasting a more pronounced depletion decline of 5%, alongside a projected 2% net revenue decline for the quarter, reflecting ongoing challenges in consumer demand and competition. Additionally, with Hispanic consumers contributing to half of the beer sales and broader consumer confidence potentially waning, there is an elevated risk to revenue, margins, and overall financial performance.