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Investing.com - RBC Capital has reiterated its Outperform rating and $200.00 price target on Constellation Brands (NYSE:STZ) following the company’s recent earnings report. The stock, which has declined over 35% year-to-date, currently trades significantly below InvestingPro’s Fair Value estimate, suggesting potential upside opportunity.
The firm described the quarter as "solid given the muted expectations and poor investor sentiment," noting that while beer depletions remain challenging due to macroeconomic factors, beer margins showed notable strength despite volume pressure.
RBC Capital highlighted the encouraging beer margin performance as evidence of Constellation Brands’ cost-saving capabilities and opportunities, even as volume challenges persist in the segment.
The firm expressed confidence about the trajectory of beer margins for the year despite ongoing volume pressure, but acknowledged that investors will likely need to see improvement in beer volumes to generate more excitement about the stock.
While maintaining its $200 price target and Outperform rating, RBC Capital noted that "patience is needed" for investors in Constellation Brands.
In other recent news, Constellation Brands reported its second-quarter fiscal 2026 earnings, delivering an earnings per share (EPS) of $3.63. This result surpassed the consensus estimate of $3.46, indicating a strong performance primarily driven by better-than-expected Beer profit, which contributed approximately $0.14 to the EPS outperformance. Despite the earnings beat, the company’s revenue fell short of expectations, coming in at $2.48 billion compared to the anticipated $2.51 billion. BMO Capital has reiterated its Outperform rating on Constellation Brands, maintaining a price target of $190.00 following the earnings report. The firm’s positive outlook is supported by the company’s ability to exceed EPS forecasts despite the revenue miss. These developments reflect ongoing investor interest and confidence in Constellation Brands’ operational strategies.
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