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How Analysts Reacted to Constellation Brands’ Q3 Results

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Jan. 11 2019, Updated 10:30 a.m. ET

Analysts’ reactions

Constellation Brands (STZ) exceeded analysts’ expectations for its fiscal 2019 third-quarter top line and earnings. However, the company’s downward revision to its fiscal 2019 earnings guidance wasn’t received well by investors or analysts.

On January 9, the day the company announced its fiscal third-quarter earnings results, Cowen and Company lowered its price target for the stock to $220 from $260. Many analysts also lowered their price targets on January 10.

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Current ratings

As of January 9, Constellation Brands stock has “buy” ratings from 18 out of 24 analysts (or 75%) and “hold” ratings from six analysts (or 25%). It hasn’t received any “sell” ratings.

As of January 9, the 12-month average price target for Constellation Brands stock is $224.43, which reflects a potential upside of 49% over the next year. However, this average price target will decrease based on the multiple downward revisions analysts made on January 10.

As of the time of writing this article on January 10, Susquehanna has cut its price target for Constellation Brands stock to $162 from $174. Wells Fargo has lowered its price target to $235 from $260, Jefferies has lowered its price target to $258 from $269, and SunTrust Robinson has lowered its price target to $165 from $180. BMO has cut its price target for Constellation Brands to $225 from $245.

As of January 10, Goldman Sachs has raised its rating for Constellation Brands to a “buy” from a “neutral” but has lowered its price target to $211 from $243.

Constellation Brands stock fell 29.6% in 2018. The stocks of its peers in the alcoholic beverage industry were also in the red last year. Anheuser-Busch InBev (BUD), Molson Coors Brewing (TAP), and Brown-Forman (BF.B) fell 41%, 31.6%, and 11.8%, respectively, in 2018.

We’ll discuss Constellation Brands’ valuations in the next article.

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