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BofA Securities lowered its price target on Constellation Brands (NYSE:STZ) stock to $180 from $195 on Wednesday, while maintaining a Neutral rating on the alcoholic beverage company. The stock, currently trading at $160.48, is near its 52-week low of $159.91, with InvestingPro analysis suggesting the company is currently undervalued.
The research firm reduced its first-quarter fiscal 2026 earnings per share estimate to $3.00 from $3.44, citing expectations for lower beer sales, beer marketing spend timing, and profit adjustments related to the company’s 2025 Mainstream Wine divestiture.
BofA’s new price target reflects approximately 13 times its calendar year 2026 earnings per share estimate, down from the previous multiple of about 14.5 times, with the firm pointing to "worsening demand trends and social/political unrest tied to STZ’s core consumer" as reasons for the lower valuation multiple.
Despite the price target reduction, BofA maintained its Neutral rating, noting that "much of the negative sentiment is priced in" to the stock already.
The firm acknowledged Constellation’s efforts to improve demand trends through innovation and by altering pack sizes to address affordability concerns among consumers.
In other recent news, Constellation Brands has been in the spotlight with several noteworthy developments. The company completed the divestiture of select mainstream wine brands, including Woodbridge and Meiomi, to The Wine Group, as part of its strategy to focus on higher-end products. This move aligns with Constellation’s commitment to premiumization, as it retains premium labels like Robert Mondavi Winery and craft spirits such as High West whiskey. In terms of financial projections, Piper Sandler raised Constellation’s stock price target to $170, reflecting expectations of faster cost savings following the divestiture. Meanwhile, Truist Securities upgraded Constellation’s stock rating to Buy, increasing the price target to $215, driven by insights from a consumer behavior study suggesting market pessimism may be overstated. Bernstein SocGen Group maintained its Outperform rating with a $225 price target, despite highlighting potential challenges related to the Hispanic consumer market. These recent developments underscore a mix of strategic shifts and analyst evaluations, shaping the outlook for Constellation Brands.
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