Beer Giant Constellation Brands’ Q4 Earnings to Top Estimates; Target Price $268

The New York-based Fortune 500 international beverage alcohol company Constellation Brands is expected to report its fiscal first-quarter earnings of $2.36 per share on Wednesday, which represents year-over-year growth of about 3% from $2.30 per share seen in the same quarter a year ago.

The corona beer marker’s revenue is predicted to rise over 4% to around $2.05 billion during the quarter ended May 2021. That comes after the company reported better-than-expected earnings in the previous quarter with profit and revenue exceeding analysts’ expectations.

Constellation Brands’ better-than-expected results, which will be announced on June 30, would help the stock hit new highs in the near term. Constellation Brands shares rose over 3% so far this year.

Analyst Comments

“We expect investor focus with FQ1 EPS will likely be on Q1 beer depletion growth and June trends, as well as the FY22 EPS outlook, which we expect Constellation Brands (STZ) to reiterate,” noted Dara Mohsenian, equity analyst at Morgan Stanley.

“Our FQ1 EPS estimate is $2.40 (including Canopy equity income losses), slightly above Eikon consensus of $2.38, or $2.58 excluding Canopy vs. Visible Alpha consensus of $2.49. We expect the market to be most focused on beer depletion trends and margins in FQ1, but also more focused on the forward outlook including June depletion trends, and EPS guidance for FY22.”

Constellation Brands Stock Price Forecast

Thirteen analysts who offered stock ratings for Constellation Brands in the last three months forecast the average price in 12 months of $268.00 with a high forecast of $305.00 and a low forecast of $219.00.

The average price target represents 18.58% from the last price of $226.00. Of those 13 analysts, 11 rated “Buy”, two rated “Hold” while none rated “Sell”, according to Tipranks.

Morgan Stanley gave the stock price forecast of $260 with a high of $310 under a bull scenario and $147 under the worst-case scenario. The firm gave an “Overweight” rating on the alcohol company’s stock.

Several other analysts have also updated their stock outlook. Deutsche Bank raised the target price to $223 from $222. MKM Partners dropped their price objective to $216 from $219 and set a “neutral” rating. Sanford C. Bernstein issued an “outperform” rating and a $305 price objective for the company. Wolfe Research issued an “outperform” rating and a $265 price objective for the company.

“We are lowering our 1Q outlook for beer, given tough off-premise revenue comps, in addition to input cost inflation and higher investment spend in the earlier part of the year. As such, we are now looking for STZ to deliver EPS of $2.40 (ex-WEED), which is two cents ahead of consensus estimates,” noted Vivien Azer, equity analyst at Cowen.

“On a total company basis, we are modeling for 4.3% reported revenue growth (vs. +4.0% Street), driven by 19% growth in beer, though offset by a ~31% decline in wine & spirits. On an organic basis, we are modeling for total company revenue growth of 14.3%, with the higher growth driven by LSD organic growth in wine & spirits.”

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