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Constellation Brands: Will Upcoming Results Help the Stock?


Oct. 1 2018, Published 8:02 a.m. ET

Stock has fallen 7.5% since first-quarter results

Constellation Brands (STZ) is expected to announce its results for the second quarter of fiscal 2019[1. The second quarter of fiscal 2019 ended on August 31, 2018.] on October 4. The company is one of the leading beer, wine, and spirits producers.

In the first quarter of fiscal 2019, which ended on May 31, it disappointed investors with lower-than-expected earnings. STZ stock has fallen 7.5% since those results were announced in June.

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Stock down year-to-date

On August 15, Constellation Brands announced a $4 billion investment in Canopy Growth (CGC), a leading cannabis company. On September 26, Canopy Growth shareholders approved the investment. That increased Constellation Brands’ stake from 9.9% to 38% but didn’t give the stock any momentum. As of September 27, STZ stock has fallen 6% YTD (year-to-date), lagging the 9% growth of the S&P 500.

With its investment in Canopy Growth, Constellation Brands aims to leverage the opportunities in the cannabis beverages space through joint product development in markets where cannabis is legal.

Other alcoholic beverage stocks are also in the red. As of September 27, Anheuser-Busch InBev (BUD), Molson Coors Brewing (TAP), and Brown-Forman (BF.B) have fallen 21%, 24.8%, and 6%, respectively, YTD.

Series overview

In this series, we’ll look at expectations for Constellation Brands’ second-quarter of 2019 sales and earnings. We’ll also look at its valuation and analyst recommendations for the stock.

Let’s start by seeing what analysts expect for Constellation Brands’ sales.


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