TD Cowen maintains Hold rating on Constellation Brands stock

Published 07/07/2025, 16:54
TD Cowen maintains Hold rating on Constellation Brands stock

Investing.com - TD Cowen has reiterated its Hold rating and $180.00 price target on Constellation Brands (NYSE:STZ), currently trading at $171.21 with a market capitalization of $30.2 billion, citing concerns about beer margins and growth. According to InvestingPro data, analyst consensus remains moderately bullish with price targets ranging from $170 to $300.

The firm lowered its fiscal year 2026 earnings per share estimate to $12.62, which falls at the lower end of the company’s $12.60-$12.80 guidance range. The adjustment primarily reflects reduced beer assumptions, with TD Cowen now modeling a 20 basis point decline in FY26 beer operating margins, consistent with management’s expected impact from a 50% tariff on aluminum. InvestingPro data reveals that 8 analysts have recently revised their earnings estimates downward, suggesting growing caution about near-term performance.

TD Cowen also reduced its beer growth projections for fiscal year 2027 to 2.6%, comprising 1% volume growth and 1.6% price/mix improvement. Despite these adjustments, the firm maintained its $180 price target, representing a 13x price-to-earnings multiple on its FY27 estimated EPS of $13.71.

While Constellation Brands stock appears inexpensive compared to its five-year average P/E of 19x, TD Cowen believes the shares will remain range-bound in the near term. The firm cites two key factors needed before a more positive outlook: evidence of recovery in the brands’ core Hispanic consumer base and improved visibility to the company’s medium-term algorithm of 2-4% growth.

In other recent news, Constellation Brands reported first-quarter earnings per share of $3.22, which fell short of Wall Street expectations. Despite the weaker-than-expected results, the company maintained its fiscal year 2026 guidance, indicating stability in its outlook. UBS raised its price target for Constellation Brands to $205, maintaining a Buy rating, and emphasized a path to long-term growth. Meanwhile, RBC Capital reiterated its Outperform rating with a $233 price target, expressing confidence in the company’s near-term growth despite ongoing challenges. Goldman Sachs also maintained a Buy rating with a $225 price target, noting that Constellation Brands’ valuation is attractive compared to its industry peers. BofA Securities adjusted its price target to $182, maintaining a Neutral rating, and raised its full-year EPS estimate following the earnings report. These recent developments highlight the varied perspectives of analysts on Constellation Brands’ future prospects.

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