uploads///STZ Valuation

Where STZ’s Valuation Stands Prior to Its Fiscal 4Q16 Results

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Nov. 20 2020, Updated 4:45 p.m. ET

12-month forward PE

On March 31, 2017, Constellation Brands (STZ) was trading at a 12-month forward PE (price-to-earnings multiple) of 22.2x. The company’s valuation multiple has risen 10.2% since the announcement of its fiscal 3Q17 results on January 5.

Constellation Brands beat analysts’ earnings expectations for fiscal 3Q17 and raised its fiscal 2017 earnings guidance.

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Peer comparison

On March 31, Constellation Brands’ peers Anheuser-Busch InBev (BUD), Molson Coors Brewing (TAP), and Brown-Forman (BF.B) were trading at 12-month forward PEs of 26.5x, 15.4x, and 25.5x, respectively.

Constellation Brands’ forward PE is currently higher than that of the S&P 500 Index (SPX), which is trading at a 12-month forward PE of 18.7x. STZ is also trading at a higher valuation than the S&P 500 Consumer Staples Index with its forward PE of 21.3x.

These companies’ 12-month forward PEs differ based on several parameters, including their growth expectations, their leverage, and their risk-return profiles.

Analysts’ expectations

Analysts expect Constellation Brands’ sales to rise 11.6% to $7.3 billion and its adjusted EPS to rise 22.4% to $6.65 in fiscal 2017. Currently, analysts expect the company’s sales and adjusted EPS to rise 5.0% and 13.0%, respectively, in fiscal 2018. These estimates may be revised based on the company’s upcoming fiscal 4Q17 results and fiscal 2018 outlook.

In the current fiscal year, the adjusted EPS of Anheuser-Busch InBev, Molson Coors Brewing, and Brown-Forman are expected to rise 53.8%, 46.2%, and -1.1%, respectively.

For more updates, visit Market Realist’s Alcoholic Beverages page.

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