Street Calls of the Week
Investing.com - BMO Capital has reduced its price target on Constellation Brands (NYSE:STZ) to $190.00 from $215.00 while maintaining an Outperform rating on the stock. The company’s shares, currently trading at $146.49, have declined 32.56% year-to-date and are hovering near their 52-week low of $146.32.
The price target reduction follows Constellation Brands’ significant lowering of its fiscal year 2026 outlook, which the company had provided only two months ago. The revised guidance reflects softer beer demand and distributor inventory rebalancing. According to InvestingPro data, 13 analysts have recently revised their earnings expectations downward, though the stock appears undervalued based on Fair Value analysis.
BMO Capital noted uncertainty about whether this would be the final reduction in outlook, as Constellation continues to assume current demand levels in its projections without clear evidence that trends have stabilized.
Despite these concerns, BMO maintained its Outperform rating, citing the stock’s depressed valuation and the firm’s belief that Constellation’s challenges are macro-related rather than structural.
The firm lowered its estimates for Constellation Brands in conjunction with the reduced price target of $190.00.
In other recent news, Constellation Brands has seen several developments affecting its financial outlook and market positioning. The company revised its beer organic growth forecast downward to a range of -4% to -2%, a notable decrease from its previous expectation of flat to +3% growth, due to continued weak consumer demand. Additionally, TD Cowen has lowered its price target for Constellation Brands to $152.00, maintaining a Hold rating, while Evercore ISI reduced its price target to $170.00, continuing with an Outperform rating. Jefferies also adjusted its price target to $179.00, citing challenges in the Hispanic consumer segment, but maintained a Buy rating.
Amid these changes, Constellation Brands announced corporate actions following its annual meeting, including equity grants for CFO Garth Hankinson, consisting of restricted stock units and performance share units. These awards are part of the company’s Long-Term Stock Incentive Plan, with vesting conditions tied to service and performance metrics. Meanwhile, Evercore ISI continues to hold an Outperform rating for the company, despite uncertainties regarding potential tariffs on Mexican imports. These recent developments provide investors with insights into the company’s strategic adjustments and market dynamics.
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