Where STZ’s Valuation Stands Prior to Its Fiscal 1Q18 Results
12-month forward PE
As of June 23, 2017, Constellation Brands (STZ) was trading at a 12-month forward PE (price-to-earnings multiple) of 23.1x.
The company’s forward PE has risen 5.9% since its announcement of its fiscal 4Q17 results in April 2017. Constellation Brands’ fiscal 4Q17 sales and earnings surpassed analysts’ estimates.
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On June 23, alcoholic beverage producers Anheuser-Busch InBev (BUD), Molson Coors Brewing Company (TAP), and Brown-Forman (BF.B) were trading at 12-month forward PEs of 27.2x, 13.2x, and 26.4x, respectively.
Currently, Constellation Brands’ forward PE is higher than the S&P 500 Index’s forward PE of 18.1x.
Fiscal 2018 expectations
We discussed analysts’ expectations for Constellation Brands’ fiscal 1Q18 sales and earnings in the previous parts of this series. The company is scheduled to announce its fiscal 1Q18 results on June 29.
Currently, analysts expect Constellation Brands’ sales to rise 4.5% to $7.7 billion in fiscal 2018. The company’s adjusted EPS (earnings per share) are expected to rise 17.6% to $7.95 in the year. These growth expectations are based on the continued demand for the company’s imported beer brands and its focus on its premium brands, which drive higher profitability.
Following its SABMiller acquisition, Anheuser-Busch InBev has strengthened its position as the largest beer producer in the United States and the world. Molson Coors has emerged as the second-largest beer manufacturer in the United States after acquiring SABMiller’s stake in joint venture MillerCoors.
Constellation Brands is the third-largest beer producer in the United States. With the competition intensifying in the beer space, it remains to be seen whether Constellation Brands’ beer portfolio will continue to enjoy strong demand.
For more updates, check out Market Realist’s Alcoholic Beverages page.