On January 7, Constellation Brands (STZ) stock was upgraded by Susquehanna and HSBC. Susquehanna upgraded Constellation Brands stock to “neutral” from “negative” and assigned a target price of $174. On the same day, HSBC upgraded its rating for Constellation Brands to “buy” from “hold” with a target price of $206. Constellation Brands stock rose 2.1% on January 7. Constellation Brands is scheduled to announce its results for the third quarter of fiscal 2019[1. Fiscal Q3 2019 ended on November 30, 2019] on January 9.
Constellation Brands’ growth has mainly been driven by the continued demand for its Mexican beer portfolio, which includes popular brands like Corona and Modelo. The company is trying to improve its wine and spirits business by focusing on premium brands. Constellation Brands has also drawn attention with its significant investment in leading cannabis company Canopy Growth (CGC).
As of January 7, Constellation Brands stock was rated as a “buy” by 71% or 17 out of 24 analysts covering the stock. As of January 7, the 12-month average target price for Constellation Brands stock was $233.13. The price estimate reflects an upside of 37% over the next 12 months.
In 2018, Constellation Brands and peers Anheuser-Busch InBev (BUD), Molson Coors (TAP), and Brown-Forman (BF.B) declined 29.6%, 41.0%, 31.6%, and 11.8%, respectively. These alcoholic beverage stocks performed worse than the S&P 500, which fell 6.2% last year.
Analysts expect Constellation Brands’ sales to increase 5.9% to $1.9 billion in the third quarter of fiscal 2019. Analysts expect the company’s EPS, excluding one-time items, to be $2.06, which reflects 3.0% growth year-over-year.