Crispr Therapeutics shares tumble after significant earnings miss
Monday, RBC Capital Markets adjusted its outlook on Constellation Brands (NYSE:STZ) shares, reducing the price target to $233 from $289, while maintaining an Outperform rating. Currently trading at $187.27, the stock sits below the broader analyst target range of $165-$300, according to InvestingPro data. The revision followed Constellation Brands’ fiscal fourth quarter results, which reflected additional demand challenges, particularly within their core Hispanic consumer demographic. Despite these challenges, the company maintained a solid gross profit margin of 52.2% in the last twelve months, though 11 analysts have recently revised their earnings expectations downward, as highlighted by InvestingPro.
The company also provided long-term guidance up to fiscal year 2026, which fell short of RBC Capital’s already lowered expectations. Despite these setbacks, the analyst at RBC Capital believes that the new guidance sets a realistic benchmark for the company to meet or exceed in the coming years. The company’s EPS forecast for FY2026 stands at $12.42, with analysts projecting a return to profitability this year.
Constellation Brands’ decision to sell off its mainstream wine brands is viewed by the analyst as a strategic move that could enhance future performance. The divestiture is expected to streamline the company’s operations and focus on more profitable segments.
In the report, the analyst stated, "STZ reported F4Q results that were hampered by incremental demand headwinds and issued FY’26/long term guidance that was below our lowered expectations. Nevertheless, we think this provides a much needed reset and sets a very achievable bar for the company to deliver against."
The analyst further emphasized the potential for growth despite the current challenges, concluding, "We reduce our price target to $233 and maintain our Outperform rating, as we continue to see material upside potential at current price levels." This sentiment suggests confidence in Constellation Brands’ ability to navigate through the current headwinds and capitalize on future opportunities.
In other recent news, Constellation Brands reported fourth-quarter earnings for fiscal year 2025 that exceeded expectations, with earnings per share (EPS) of $2.63, surpassing the consensus estimate of $2.28. Despite this positive outcome, the company has provided EPS guidance for fiscal year 2026 that falls below the consensus, citing challenges such as a difficult consumer environment and the impact of tariffs. The company has also revised its medium-term growth expectations, with beer segment revenue growth now projected at 2-4%, down from previous higher forecasts. Analysts have adjusted their price targets in response to these developments. Jefferies cut its target to $196, maintaining a Hold rating, while TD Cowen set a target of $180 with a Hold rating, and BofA Securities reduced its target to $195, keeping a Neutral stance. BMO Capital Markets lowered its target to $215 but maintained an Outperform rating, highlighting the company’s long-term potential. Citi also adjusted its target to $190, retaining a Neutral rating, noting that the revised beer revenue expectations have limited downside risk. Constellation Brands’ strategic moves, including the divestiture of certain wine brands, aim to realign its portfolio and adapt to current market conditions.
This article was generated with the support of AI and reviewed by an editor. For more information see our T&C.