Constellation Brands (STZ) is set to release its 31 FY25 results on January 10. Wall Street analysts expect the company to report earnings of $3.31 per share for Q3, up 3.8% year-over-year. Meanwhile, revenues are expected to increase by 2.4% year-over-year, reaching $2.53 billion for the quarter.
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With a market capitalization of $40.5 billion, STZ is an alcohol company that produces beer, wine, and spirits. The company’s portfolio features premium brands like Corona, Modelo, Robert Mondavi, and SVEDKA Vodka across the U.S., Canada, Mexico, and other international markets.
It’s important to highlight that Constellation Brands lost about 12% of its value over the past year. This downturn is primarily due to challenges in its Wine and Spirits segment, which has faced declining sales amid tough market conditions. Additionally, the Surgeon General’s warning about alcohol’s link to cancer may further reduce alcohol sales, continuing the overall slowdown in this sector.
Analysts’ Opinions Ahead of STZ’s Q3 Earnings
As Constellation Brands prepares to release its Q3 results, analysts remain divided. Six analysts maintain Buy ratings, while two have issued Hold ratings for the stock.
Among the cautious analysts, Robert Moskow of TD Cowen lowered his price target to $260 and reiterated a Hold rating. Moskow expects 2025 to be tough for the food and beverage sector, including Constellation Brands, due to slow GLP-1 adoption, minimal regulatory changes, and consumers adjusting to higher prices. He suggests brands may need to lower prices to attract customers.
Similarly, Bank of America Securities analyst Bryan Spillane issued a Hold rating for Constellation Brands, highlighting concerns over shipment and volume trends. He highlighted Beer Institute data pointing to a potential drop in Q3 beer shipments, with retail volumes growing slower than expected.
What Do Options Traders Anticipate?
Using TipRanks’ Options tool, we can see what options traders are expecting from the stock immediately after its earnings report. The expected earnings move is determined by calculating the at-the-money straddle of the options closest to expiration after the earnings announcement. If this sounds complicated, don’t worry, the Options tool does this for you.
Indeed, it currently says that options traders are expecting a 3.67% move in either direction.
Is Constellation Brands a Good Stock to Buy?
Turning to Wall Street, analysts have a Moderate Buy consensus rating on STZ stock based on 11 Buys and four Holds assigned in the last three months, as indicated by the graphic below. The average STZ price target of $289.47 per share implies 32.01% upside potential.
