Constellation Brands stock price target lowered to $195 at UBS

Investing.com - UBS lowered its price target on Constellation Brands (NYSE:STZ) to $195 from $205 on Monday while maintaining a Buy rating ahead of the company’s first-quarter earnings report. The stock, currently trading at $163.04, sits near its 52-week low of $159.35, having declined over 26% in the past six months. InvestingPro analysis suggests the stock is currently undervalued, with additional insights available in the comprehensive Pro Research Report.

The alcoholic beverage giant is scheduled to report its fiscal first-quarter earnings on July 1 before markets open, with UBS forecasting earnings per share of $3.15, below the Visible Alpha consensus of $3.41. InvestingPro data reveals that six analysts have recently revised their earnings estimates downward for the upcoming period.

UBS noted that Constellation shares have underperformed and while valuation looks attractive on an absolute basis, investors will likely wait for signs of improving category trends and market share performance before becoming more positive on the stock.

The firm believes the upcoming earnings report is unlikely to serve as a positive catalyst, citing slower consumption trends that suggest top and bottom-line growth will likely come in at the lower end of guidance ranges.

Despite near-term challenges, UBS maintains that Constellation can achieve low-single-digit organic revenue growth and mid-single-digit EPS growth over time, which it considers an attractive growth profile at approximately 12 times next-twelve-months earnings.

In other recent news, Constellation Brands has seen a series of analyst actions and market developments. Evercore ISI lowered its price target for Constellation Brands to $210 from $225, maintaining an "In Line" rating due to expected pressure on volume trends and projected earnings for fiscal year 2026. The firm anticipates beer depletions to decrease slightly, with a focus on marketing spend in the first half of the fiscal year, potentially impacting first-quarter results. BofA Securities also reduced its price target to $180 from $195, citing concerns over beer sales and the timing of marketing expenditures, while maintaining a Neutral rating.

Meanwhile, Bernstein SocGen Group reiterated an Outperform rating with a $225 price target, highlighting potential challenges in the Hispanic consumer market but expressing confidence in the company’s growth potential. This comes amid broader industry news, such as potential changes in U.S. drinking guidelines that could impact alcohol consumption patterns. The changes may replace specific daily drink limits with a more general moderation recommendation, possibly benefiting companies like Constellation Brands. Despite these varied analyst perspectives and market shifts, Constellation Brands continues to navigate economic pressures and consumer trends.

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