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Constellation Brands (STZ) Outpaces Stock Market Gains: What You Should Know

Zacks Equity Research

Constellation Brands (STZ) closed at $179.38 in the latest trading session, marking a +1.68% move from the prior day. This change outpaced the S&P 500's 1.48% gain on the day. At the same time, the Dow added 2.21%, and the tech-heavy Nasdaq gained 0.77%.

STZ will be looking to display strength as it nears its next earnings release. In that report, analysts expect STZ to post earnings of $1.87 per share. This would mark a year-over-year decline of 15.38%. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $2.07 billion, down 1.28% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $7.86 per share and revenue of $7.78 billion. These totals would mark changes of -13.82% and -6.71%, respectively, from last year.

Investors might also notice recent changes to analyst estimates for STZ. Recent revisions tend to reflect the latest near-term business trends. As a result, we can interpret positive estimate revisions as a good sign for the company's business outlook.

Based on our research, we believe these estimate revisions are directly related to near-team stock moves. To benefit from this, we have developed the Zacks Rank, a proprietary model which takes these estimate changes into account and provides an actionable rating system.

The Zacks Rank system ranges from #1 (Strong Buy) to #5 (Strong Sell). It has a remarkable, outside-audited track record of success, with #1 stocks delivering an average annual return of +25% since 1988. Within the past 30 days, our consensus EPS projection remained stagnant. STZ currently has a Zacks Rank of #3 (Hold).

In terms of valuation, STZ is currently trading at a Forward P/E ratio of 22.43. This represents a discount compared to its industry's average Forward P/E of 26.03.

Investors should also note that STZ has a PEG ratio of 14.76 right now. This metric is used similarly to the famous P/E ratio, but the PEG ratio also takes into account the stock's expected earnings growth rate. The Beverages - Alcohol was holding an average PEG ratio of 4.37 at yesterday's closing price.

The Beverages - Alcohol industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 81, which puts it in the top 32% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

To follow STZ in the coming trading sessions, be sure to utilize

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