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On Wednesday, RBC Capital Markets reiterated their Outperform rating on Constellation Brands stock, with a price target of $289.00. The stock, currently trading near its 52-week low of $160.46, has seen a significant decline of 28% over the past six months. According to InvestingPro data, the firm's analysis anticipates several key developments for the company in the near future.
The RBC Capital analyst provided insights ahead of Constellation Brands' fourth-quarter earnings, due in just two days, forecasting a 2% decline in depletions for the quarter, with March volumes expected to show a low single-digit percentage drop. While the company maintained a solid revenue growth of 3.7% over the last twelve months, the analyst suggested that due to macroeconomic weakness and prevailing uncertainties, Constellation Brands might lower its beer top line growth projection to a range of 4% to 6%, a decrease from the previous 7% to 9% estimate.
Furthermore, the analyst expects Constellation Brands to provide a broad guidance range for fiscal year 2026 earnings per share to accommodate potential impacts from tariffs. It is anticipated that the company will not adjust pricing in response to these tariffs.
Additionally, there is speculation that Constellation Brands may announce the divestiture of its entire wine business or at least the lower-end of its portfolio. This includes the Woodbridge brand, which has notably impacted the company's growth.
Constellation Brands, listed on the New York Stock Exchange under the ticker (NYSE:STZ), has yet to confirm these predictions. The company's upcoming earnings report will likely provide clarity on these matters and outline the strategic direction for the next fiscal year. For deeper insights into Constellation Brands' financial health and valuation metrics, investors can access comprehensive analysis through InvestingPro, which offers exclusive access to over 30 key financial metrics and expert insights.
In other recent news, Constellation Brands is preparing to report its upcoming earnings, with UBS analyst Peter Grom forecasting an EPS of $2.29, slightly down from previous estimates. This announcement will be closely watched, particularly as the company has adjusted its Diversity, Equity, and Inclusion (DEI) efforts, ceasing participation in LGBTQ advocacy surveys and lobbying not directly related to its core business. Meanwhile, Bernstein analysts have raised the company's price target to $260, citing clarity on aluminum tariffs affecting beer packaging costs. These tariffs, clarified to apply only to the aluminum content of beer cans, are expected to have a limited impact on the company's gross margins.
BofA Securities has maintained a Neutral rating with a $205 price target, noting adjustments in Constellation Brands' shipment forecasts based on recent Beer Institute data. The company's inventory levels appear to have been increased ahead of the tariff announcements, impacting earnings projections. UBS continues to hold a Buy rating despite lowering the price target to $205, suggesting a cautious but positive outlook. Investors are keenly awaiting the company's fourth-quarter earnings report to gauge the financial impact of these recent developments.
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