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Do Analysts See Upside in Constellation Brands Stock?

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Dec. 4 2020, Updated 10:52 a.m. ET

Consensus ‘buy’ rating

Constellation Brands (STZ) has a “buy” recommendation from most of the analysts covering the stock. As of September 27, 17 of the 23 analysts (or 74%) covering STZ stock rated it a “buy,” four rated it a “hold,” and two gave it a “sell.”

On September 7, Jefferies initiated coverage of Constellation Brands stock with a “buy” rating and a price target of $283. On September 10, SunTrust Robinson lowered its rating from a “buy” to a “hold” and its price target from $260 to $220.

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Constellation Brands is investing heavily in the expansion of its production capacity to support the demand for its imported beer brands. It’s following a premiumization strategy in its beer, wine, and spirits businesses. Its efforts to grow its presence in the premium end of the beer, wine, and spirits space is expected to boost its sales as well as its margins.

The company is innovating new products and offering line extensions on existing brands. Corona Premier and Corona Familiar rank among its successful product launches recently.

Its 38% stake in Canopy Growth is seen as an interesting strategic move to capitalize on growth prospects in the cannabis market.

Price targets

On September 27, Morgan Stanley lowered its price target for Constellation Brands stock to $251 from $258. JPMorgan lowered its price target to $250 from $260. That same day, Barclays raised its price target to $257 from $255.

As of September 27, the 12-month average price target for STZ stock was $243.68, implying a potential to rise ~13%. The stock has fallen 6% year-to-date. The company’s upcoming second quarter of 2019 results expected on October 4 could cause further revisions to analysts’ price targets.

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