RBC maintains Outperform on Constellation Brands, target at $293

On Monday, RBC Capital Markets maintained their positive stance on Constellation Brands stock (NYSE:STZ), currently trading at $174.81 with a market capitalization of $31.6 billion, reiterating an Outperform rating with a steady price target of $293.00. The firm’s analysis suggests that the current share value already reflects the potential impacts of tariffs and cyclical top-line concerns, indicating that the market may have overreacted negatively. According to InvestingPro, technical indicators suggest the stock is in oversold territory, with several additional insights available to subscribers.

The commentary from RBC Capital highlighted that the issue of tariffs isn’t a new challenge for Constellation Brands, as the company’s stock has been sensitive to tariff-related news since early the previous year. The stock has declined significantly, falling 26.7% over the past year and currently trading near its 52-week low of $176.51. Despite this, RBC Capital believes that the negative reaction in the stock’s price is more than what is justified by the underlying factors.

According to RBC Capital, there is an expectation that Constellation Brands shares could experience limited movement in the short term. Nonetheless, the firm maintains a long-term optimistic outlook on the stock. The analyst’s position is that the current weakness in the stock presents a buying opportunity for investors looking at the bigger picture. InvestingPro’s Fair Value analysis indicates the stock may be undervalued at current levels, though investors should note it trades at a relatively high P/E ratio of 49.

Constellation Brands, known for its beer, wine, and spirits portfolio, has been navigating through the complexities of international trade and tariffs that can affect its cost structure and profit margins. However, based on RBC Capital’s assessment, these factors have been sufficiently accounted for in the stock’s current trading price.

Investors and market watchers will continue to monitor Constellation Brands’ performance, especially in light of ongoing trade discussions and economic indicators that influence the company’s market position. The reaffirmed Outperform rating and $293.00 price target by RBC Capital Markets remains a key point of reference for the stock’s potential trajectory.

In other recent news, Constellation Brands has been the focus of numerous analyst revisions following its recent earnings report. Piper Sandler downgraded the company’s rating from Overweight to Neutral and reduced the price target to $200, citing concerns over new tariffs and weaker retail momentum. Despite these challenges, Bernstein SocGen Group maintained an Outperform rating for the company, which reported a 3.2% growth in Q3 depletions and beer net sales of $2,032 million. RBC Capital Markets and Truist Securities reduced their price targets for Constellation Brands to $293 and $190 respectively, while TD Cowen held a Hold rating on the company’s stock following third-quarter results that fell short of expectations. Constellation Brands is also planning expansions of Modelo and Pacifico, which is expected to contribute to long-term market share gains. These are the most recent developments for Constellation Brands.

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