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On Thursday, Needham analysts adjusted their outlook for Constellation Brands (NYSE:STZ), reducing the price target from $240 to $215 while maintaining a Buy rating on the company’s shares. This adjustment aligns with broader analyst sentiment, as InvestingPro data shows analyst targets ranging from $180 to $300, with seven analysts recently revising earnings expectations downward. The revision comes ahead of the company’s fiscal fourth-quarter 2025 earnings report, which is scheduled for release after the market closes on April 9, 2025.
The analysts noted that despite the anticipated focus on various discussion topics during the earnings call, the quarterly performance of Constellation Brands might be overshadowed by broader concerns. They pointed out that growth trends have decelerated, with InvestingPro data revealing revenue growth of 3.7% and the stock experiencing a significant 28% decline over the past six months. The company is facing increased challenges with their core Hispanic consumer base.
The sentiment going into the earnings report is quite low, which, according to the analysts, presents Constellation Brands with an opportunity to manage expectations effectively. The company has the chance to demonstrate their ability to navigate through current challenges and discuss strategies to mitigate the growing headwinds.
In preparation for the upcoming earnings announcement, Needham has revised its fiscal year 2026 projections based on a more cautious short-term outlook for the company’s beer segment. The new forecast anticipates a 3.8% increase in beer revenue for the year, with earnings per share (EPS) projected at $13.99.
The adjustment in the price target to $215 reflects lowered earnings expectations combined with a reduced target multiple. Constellation Brands is expected to address these issues and provide insights into their operational strategy during the forthcoming earnings call.
In other recent news, Constellation Brands has faced several adjustments to its stock price target and ratings from multiple analysts. Evercore ISI reduced its price target for Constellation Brands to $225, citing a decline in tracked channel volumes and uncertainties regarding tariff exposure. TD Cowen also lowered its price target to $200, expressing concerns over anticipated tariffs and a predicted slowdown in beer consumption, particularly affecting the Hispanic demographic. RBC Capital Markets made a slight adjustment, reducing their target to $289 while maintaining an Outperform rating, highlighting the challenges despite the company’s achievements in top-line growth and margins.
Bernstein adjusted its outlook, cutting the price target to $230 in response to new tariffs on Mexican imports, which significantly impact Constellation Brands due to its reliance on Mexican beer. The firm reduced its earnings per share estimates by roughly 25% but maintained an Outperform rating. Meanwhile, Morgan Stanley (NYSE:MS) downgraded Constellation Brands from Overweight to Equal-weight, lowering the price target to $202 due to concerns over long-term growth prospects in the beer segment and changing consumer preferences. These recent developments reflect the challenges Constellation Brands is navigating in the current economic and political climate.
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