Constellation Brands (STZ) Looks Solid, Strategies On Track

A prudent investor takes advantage of stocks which appear promising at the right juncture. Hence, we suggest investing in Constellation Brands Inc. (NYSE:STZ) , as the stock has been gaining traction on the back of its splendid earnings history, solid strategic initiatives and inherent strength.

Spectacular Earnings History

Constellation Brands boasts a robust earnings history, as its bottom line has outperformed the Zacks Consensus Estimate for seven straight quarters now, with an average beat of 8.1%. The company recently posted stellar first-quarter fiscal 2017 results, wherein both top and bottom lines registered double-digit growth and exceeded expectations.

Results were backed by the company’s effective integration and growth of its recently acquired brands, higher margins across its portfolio along with strong consumer demand. Also, strength in its beer business, improving trends at its wine and spirits business, and solid overall depletion trends aided the beat.

Given the impressive first quarter, the company remains optimistic of its fiscal 2017 performance. The strong results and encouraging outlook also caused an uptrend in the Zacks Consensus Estimate for fiscal 2017, which increased from $6.29 to $6.31, over the past 7 days.

Growth Strategies

Constellation Brands, which shares space with other well-established players including Compania Cervecerias Unidas S.A. (NYSE:CCU) , Molson Coors Brewing Company (NYSE:TAP) and Boston Beer Co. Inc. (NYSE:SAM) , has a formidable portfolio of well-known brands, and is the largest wine company in the world. The company has a dominant position in the premium wine and beer segment in the U.S., which provides it with a competitive edge, and further bolsters its well-established position in the market.

Constellation Brands’ constant focus on brand building and its initiatives to include new products in its wine and spirits business are the key revenue drivers for the stock. Backed by its strategic endeavors, the company is witnessing robust depletion trends and increasing market share in the U.S. wine and spirits category. Also, it strives to enhance points of distribution at retail and effectively execute its strategic merchandising initiatives to boost sales.

These factors, along with Constellation Brands’ focus on acquisitions and constant shareholder-friendly moves bode well, instilling confidence among investors. Thus, we believe that it is the right time to take advantage of Constellation Brands’ bull-run, as the stock is likely to keep its momentum going.

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Zacks Investment Research