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On Tuesday, UBS analyst Peter Grom adjusted the price target for Constellation Brands (NYSE:STZ) shares, reducing it to $205.00 from the previous $223.00. Despite this change, the firm maintained a Buy rating on the stock. According to InvestingPro data, the stock has experienced a significant 27.7% decline over the past six months, with analyst targets ranging from $165 to $300. Grom provided insight into the company's upcoming fourth-quarter earnings per share (EPS) announcement, which is scheduled for Wednesday after the market closes, followed by a conference call on Thursday morning. This marks a departure from Constellation Brands' typical earnings release routine.
The analyst noted that several key factors influencing the company's performance remain uncertain, including tariffs, beer demand, and the state of the wine and spirits sectors. In anticipation of the earnings report, UBS has slightly revised its EPS estimate for the quarter to $2.29, a minor decrease from the previous estimate of $2.30. InvestingPro data reveals that eight analysts have recently revised their earnings estimates downward, while the company maintains a "GOOD" overall Financial Health Score. Grom suggested that while the immediate financial results might not be the main focus, the market is more interested in the company's future outlook.
Grom also mentioned that there is a possibility for Constellation Brands to use this earnings announcement as an opportunity to reset expectations for the fiscal year 2026 and beyond. While some investors may adopt a wait-and-see approach, UBS believes that the current market sentiment towards the stock is quite bearish, implying that potential downsides may have already been factored into its price.
Looking forward, Grom emphasized that patience might be necessary, but he remains confident in Constellation Brands' potential for strong top and bottom line growth in the long term compared to its industry peers. He concluded that the risk/reward profile for the company's stock is attractive at its current levels. The company has demonstrated steady performance with revenue of $10.2 billion and 3.7% growth in the last twelve months, while maintaining a 10-year consecutive dividend increase streak. For deeper insights into Constellation Brands' valuation and growth prospects, investors can access comprehensive analysis through InvestingPro's detailed research reports.
In other recent news, Constellation Brands is preparing to release its fiscal fourth-quarter 2025 earnings report, which is scheduled for release after the market closes. Analysts have been adjusting their price targets and expectations ahead of this announcement. Bernstein analysts raised their price target to $260, citing clarity on aluminum tariffs that only affect the aluminum content of beer cans, which is expected to have a limited impact on the company's gross margins. Needham analysts, however, reduced their price target to $215, expressing concerns about slowing growth trends and challenges with the core Hispanic consumer base.
BofA Securities maintained a price target of $205, noting an increase in inventory levels before the tariff announcement and adjusting their earnings per share estimate for the fourth quarter to $2.36. Evercore ISI also lowered its price target to $225, pointing to a decline in tracked channel volumes and uncertainties surrounding tariff exemptions under the USMCA. These recent developments highlight the mixed sentiment among analysts regarding Constellation Brands' short-term performance.
Investors are particularly interested in how the company will address these challenges and manage expectations during the upcoming earnings call. Constellation Brands' ability to navigate tariff implications and consumer base challenges will be closely scrutinized. The company's strategies and operational insights during the earnings announcement will be key areas of focus for stakeholders.
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