Spain’s credit rating upgraded to ’A+’ by S&P on strong growth
Investing.com - Evercore ISI reduced its price target on Constellation Brands (NYSE:STZ) to $170.00 from $210.00 on Wednesday, while maintaining an Outperform rating on the alcoholic beverage company’s stock. The company, currently trading at $146.49, near its 52-week low of $149.36, appears undervalued according to InvestingPro analysis.
The price target reduction follows Constellation Brands’ guidance downgrade and presentation at an industry conference on Tuesday, after which the company hosted a sell-side roundtable to provide additional context. The stock has declined 30.37% year-to-date, though InvestingPro data shows analysts expect the company to return to profitability this year.
Evercore ISI cited lower volume estimates and increased risk from potential further volume declines as key factors in its decision, noting these would have an adverse impact on the company’s profit and loss statement through operating deleveraging.
The firm identified challenges to Constellation’s core Hispanic demographic as the predominant driver for weaker volumes, alongside broader pressures on consumer disposable income and specific challenges facing the U.S. beverage alcohol industry.
Despite these concerns, Evercore ISI maintained its Outperform rating, stating that at the current valuation, the positives modestly outweigh the negatives from a medium-term perspective, though it acknowledged limited visibility on when economic and political pressures might ease.
In other recent news, Constellation Brands reported first-quarter earnings per share of $3.22, which fell short of Wall Street expectations. This was attributed to softer organic sales growth, ongoing macroeconomic headwinds, and volume declines across key brands. UBS raised its price target for Constellation Brands to $205.00 from $195.00, maintaining a Buy rating based on a positive long-term growth outlook despite the weaker-than-expected earnings. Meanwhile, Jefferies lowered its price target to $179.00 from $205.00, citing challenges in the Hispanic consumer segment. Evercore ISI maintained its Outperform rating with a $210.00 price target amid concerns over potential tariffs on Mexican imports. TD Cowen reiterated a Hold rating and set a price target of $180.00, adjusting its fiscal year 2026 earnings per share estimate to $12.62 due to beer margin concerns. Additionally, Constellation Brands announced equity awards for CFO Garth Hankinson, with restricted and performance share units set to vest in the future. These developments reflect the company’s ongoing strategic and financial challenges and opportunities.
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