Cautious Outlook for Constellation Brands Amid Weaker Beer Consumption and Tariff Concerns

TD Cowen analyst Robert Moskow has maintained their neutral stance on STZ stock, giving a Hold rating on March 3.

Robert Moskow has given his Hold rating due to a combination of factors affecting Constellation Brands. The primary concern is the weaker consumption patterns in their beer segment, largely influenced by declining consumer confidence within their core Hispanic market. This demographic is facing challenges such as rising unemployment, which is contributing to reduced consumption rates.
Additionally, the anticipated tariffs on imports from Mexico and Canada are expected to significantly impact the company’s earnings per share (EPS) in FY26. These tariffs are projected to create a 20% headwind to EPS, leading management to potentially adjust their growth expectations. Despite these challenges, the company plans to raise beer prices to offset some of the tariff costs, but this strategy carries risks of affecting volume momentum. These factors combined have led to a cautious outlook, justifying the Hold rating.

According to TipRanks, Moskow is a 3-star analyst with an average return of 2.4% and a 48.03% success rate. Moskow covers the Consumer Defensive sector, focusing on stocks such as Vital Farms, McCormick & Company, and Constellation Brands.

In another report released on March 3, Piper Sandler also maintained a Hold rating on the stock with a $200.00 price target.