On Tuesday, TD Cowen maintained a positive outlook on shares of Constellation Brands (NYSE:STZ), reiterating a Buy rating and a $300.00 price target for the company's shares. The firm's analysis suggests a steady confidence in the company's earnings potential, despite anticipating a decline in the wine and spirits segment.
Constellation Brands' first-quarter and fiscal year 2025 earnings per share (EPS) estimates remain above consensus, with forecasts set at $3.53 and $13.70 respectively. These figures slightly surpass the FactSet consensus, which predicts $3.46 for the first quarter and $13.65 for the fiscal year 2025.
The firm's sales growth projections for Constellation Brands are more conservative compared to the consensus. They expect a 3% decrease in wine and spirits sales for fiscal year 2025, which is a steeper decline than the 1% drop anticipated by FactSet. Still, for the beer segment, the firm's sales growth estimates align with consensus, predicting 9% growth in the first quarter and 8.5% for fiscal year 2025.
TD Cowen also forecasts a stronger first-quarter EBIT (earnings before interest and taxes) margin for Constellation Brands, attributing the 120 basis points increase to anticipated productivity enhancements and marketing efficiencies. This margin improvement is expected to contribute to the company's overall financial performance in the near term.
In other recent news, Constellation Brands has been the focus of several Wall Street firms. Citi maintains a Buy rating on the company, anticipating a 7-9% year-over-year increase in beer sales and an 8-10% growth in beer operating income for the financial year 2025.
Still, a decline in Wine & Spirits operating income is expected, ranging from 9% to 11%. RBC Capital Markets also sustained an Outperform rating, foreseeing that Constellation Brands could potentially increase future cash distributions to shareholders.
Jefferies analysts have also sustained a Buy rating, forecasting a 6% increase in beer depletions and sales growth of 6.3% for the first quarter. TD Cowen praised Constellation Brands for its strategic move to convert its stake in Canopy Growth (NASDAQ:CGC) into non-voting shares to reduce the impact on its GAAP earnings. These are the recent developments that investors should keep an eye on.
InvestingPro Insights
As TD Cowen maintains a buoyant stance on Constellation Brands, the latest data from InvestingPro fortifies this perspective with some compelling metrics. The company boasts a solid Market Cap of $46.66B and a P/E Ratio standing at 27.03, reflecting a stable investment profile. Moreover, Constellation Brands has demonstrated a consistent ability to grow, with a Revenue Growth of 5.39% over the last twelve months as of Q4 2024, underscoring the firm's adeptness at expanding its financial footprint.
InvestingPro Tips highlight that Constellation Brands has cultivated a reputation for reliability among investors, having raised its dividend for 9 consecutive years, which is a testament to its financial health. The company's liquid assets surpass its short-term obligations, indicating a robust balance sheet that can reassure stakeholders of its fiscal prudence.
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