Constellation Brands Stock: Why Most Analysts Rate It a ‘Buy’
As of September 28, 2017, Constellation Brands (STZ) stock was rated a “buy” by 13 of 19 (68.0%) analysts. Six analysts assigned it a “hold” rating. None of the analysts currently have a “sell” recommendation on the stock. There have been two changes in analysts’ recommendations since the company announced its fiscal 1Q18 results in June 2017.
On July 24, 2017, Goldman Sachs downgraded Constellation Brands stock to “neutral” from “buy” and reduced the price target to $210 from $212. On September 15, 2017, Macquarie initiated coverage on Constellation Brands stock with an “outperform” rating and a price target of $227.
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Consensus “buy” rating
Constellation Brands’ impressive earnings growth rate and continued demand for its imported beer portfolio are supporting its consensus “buy” rating. The company is further strengthening its position in the beer market by expanding its production capacity. Its Nava Brewery facility completed its expansion to a production capacity of 25.0 million hectoliters and is on track for the next phase of expanding to 27.5 million hectoliters.
Constellation Brands is the third-largest beer producer in the US market. Anheuser-Busch InBev is the largest brewer, followed by Molson Coors (TAP).
Constellation Brands is also strengthening its position in the premium wine and spirits market through innovation and strategic acquisitions. We looked at its strategic acquisitions in Part 3 of this series.
12-month price target
As of September 28, 2017, the average 12-month price target for Constellation Brands stock was $214. That price estimate reflects a potential upside of 7.4% compared to the closing price of $199.30 on September 28. As we saw in Part 1 of this series, Constellation Brands stock has risen an impressive 30.0% since the start of 2017.
The company’s upcoming fiscal 2Q18 results on October 5, 2017, could result in a revision to its 12-month price target.
For more updates, be sure to visit Market Realist’s Alcoholic Beverages page.