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Investing.com - JPMorgan has assumed coverage on Constellation Brands (NYSE:STZ) with a Neutral rating and a price target of $153.00. This target sits above the current price of $127.95, with the stock trading near its 52-week low of $127 and significantly below its 52-week high of $245.31.
The firm notes that while Constellation Brands should be a long-term winner in the beer category due to its exposure to faster-growing consumer demographics and premium positioning, near-term challenges persist in the market. InvestingPro analysis suggests the stock is currently undervalued, with a P/E ratio of 18.81 that appears attractive relative to near-term earnings growth potential.
Recent consumption trends remain soft, with tracked channel volumes down 3.6% in the last seven weeks through October 18, 2025, compared to a 3.0% decline in the 13 weeks ending August 30, 2025, according to JPMorgan’s analysis.
The firm identifies several headwinds facing the company, including tougher year-over-year comparisons in the fiscal third quarter, potential impacts from immigration enforcement affecting Hispanic consumer sentiment, and the risk of further distributor inventory destocking if volume performance remains weak.
JPMorgan acknowledges that Constellation’s fiscal year 2026 margin guidance could be conservative given historical seasonality, with guidance embedding approximately 35% second-half beer operating margins versus roughly 40% in the first half.
In other recent news, Constellation Brands has made several notable announcements and received updated analyst ratings. The company reported second-quarter earnings per share of $3.63, surpassing estimates from TD Cowen, even as depletions fell by 2.7%, which was better than the expected 4.5% decline. Constellation Brands has also issued $500 million in 4.950% Senior Notes due in 2035, with a public offering price set at 99.716% of the principal amount. The issuance was made under a supplemental indenture with Manufacturers and Traders Trust Company acting as trustee.
Additionally, Constellation Brands terminated a $500 million delayed draw term loan credit agreement with no borrowings outstanding and no early termination penalties incurred. In terms of analyst ratings, TD Cowen lowered its price target for Constellation Brands to $144 while maintaining a Hold rating. Meanwhile, Bernstein reiterated an Outperform rating with a price target of $195, citing potential impacts of immigration policies on Hispanic consumer purchasing behaviors. These developments reflect ongoing financial strategies and market evaluations impacting Constellation Brands.
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