Zacks Investment Research Lowers Constellation Brands (STZ) to Sell

Constellation Brands (NYSE:STZ) was downgraded by Zacks Investment Research from a “hold” rating to a “sell” rating in a report issued on Monday.

According to Zacks, “Constellation Brands lagged the industry in the past month as it slashed earnings outlook for fiscal 2019. The soft view stems from expectations of higher interest expense and softness in wine and spirits business. Notably, incremental interest expense related to investment in Canopy Growth is likely to reduce earnings per share by 25 cents in fiscal 2019. Further, lowered sales and operating income view for the wine and spirits segment is likely to weigh on earnings. Moreover, higher transportation, operating and marketing expenses hurt operating margin for beer segment in fiscal third quarter, which is likely to continue in fiscal 2019. However, the company is gaining from constant brand-building efforts, acquisitions and e-commerce initiatives. Solid earnings and sales surprise history also reflects its inherent strength. The company is also poised to gain from exposure in the cannabis space with its investment in Canopy Growth.”

STZ has been the topic of several other research reports. Morgan Stanley set a $246.00 price objective on shares of Constellation Brands and gave the stock a “buy” rating in a research note on Thursday, December 20th. Jefferies Financial Group restated a “buy” rating and issued a $289.00 price objective on shares of Constellation Brands in a research note on Friday, December 7th. Susquehanna Bancshares lowered their price objective on shares of Constellation Brands from $171.00 to $165.00 and set a “negative” rating on the stock in a research note on Monday, October 1st. Bank of America raised their price objective on shares of Constellation Brands from $235.00 to $240.00 and gave the stock a “buy” rating in a research note on Friday, October 5th. Finally, SunTrust Banks restated a “hold” rating on shares of Constellation Brands in a research note on Thursday. Two investment analysts have rated the stock with a sell rating, seven have given a hold rating, seventeen have issued a buy rating and two have given a strong buy rating to the company. Constellation Brands presently has an average rating of “Buy” and a consensus target price of $228.09.

Shares of Constellation Brands stock opened at $159.21 on Monday. The firm has a market capitalization of $28.60 billion, a PE ratio of 18.26, a P/E/G ratio of 1.57 and a beta of 0.38. The company has a debt-to-equity ratio of 0.80, a quick ratio of 0.76 and a current ratio of 1.66. Constellation Brands has a 1 year low of $150.37 and a 1 year high of $236.62.

Constellation Brands (NYSE:STZ) last announced its quarterly earnings data on Wednesday, January 9th. The company reported $2.37 earnings per share (EPS) for the quarter, topping the consensus estimate of $2.04 by $0.33. The business had revenue of $1.97 billion for the quarter, compared to the consensus estimate of $1.91 billion. Constellation Brands had a net margin of 35.27% and a return on equity of 18.27%. Constellation Brands’s quarterly revenue was up 9.5% on a year-over-year basis. During the same quarter last year, the company posted $2.00 earnings per share. On average, sell-side analysts anticipate that Constellation Brands will post 9.25 earnings per share for the current year.

In other Constellation Brands news, VP Thomas Michael Kane sold 4,419 shares of Constellation Brands stock in a transaction on Friday, October 19th. The shares were sold at an average price of $223.83, for a total transaction of $989,104.77. Following the sale, the vice president now owns 8,499 shares in the company, valued at $1,902,331.17. The transaction was disclosed in a filing with the Securities & Exchange Commission, which can be accessed through this link. Also, Chairman Richard Sands sold 148,773 shares of Constellation Brands stock in a transaction on Monday, October 22nd. The stock was sold at an average price of $223.69, for a total transaction of $33,279,032.37. Following the sale, the chairman now owns 346,525 shares in the company, valued at approximately $77,514,177.25. The disclosure for this sale can be found here. Insiders have sold 578,723 shares of company stock worth $129,438,449 in the last quarter. Corporate insiders own 15.80% of the company’s stock.

Institutional investors and hedge funds have recently bought and sold shares of the business. BlackRock Inc. lifted its holdings in shares of Constellation Brands by 0.6% during the third quarter. BlackRock Inc. now owns 12,057,795 shares of the company’s stock valued at $2,599,903,000 after acquiring an additional 70,095 shares during the period. Vanguard Group Inc. lifted its holdings in shares of Constellation Brands by 0.3% during the third quarter. Vanguard Group Inc. now owns 12,013,148 shares of the company’s stock valued at $2,590,276,000 after acquiring an additional 30,782 shares during the period. Vanguard Group Inc lifted its holdings in shares of Constellation Brands by 0.3% during the third quarter. Vanguard Group Inc now owns 12,013,148 shares of the company’s stock valued at $2,590,276,000 after acquiring an additional 30,782 shares during the period. FMR LLC lifted its holdings in shares of Constellation Brands by 6.0% during the second quarter. FMR LLC now owns 5,969,243 shares of the company’s stock valued at $1,306,489,000 after acquiring an additional 337,338 shares during the period. Finally, Capital World Investors lifted its holdings in shares of Constellation Brands by 3.4% during the third quarter. Capital World Investors now owns 4,054,750 shares of the company’s stock valued at $874,285,000 after acquiring an additional 133,500 shares during the period. Hedge funds and other institutional investors own 72.56% of the company’s stock.

About Constellation Brands

Constellation Brands, Inc, together with its subsidiaries, produces, imports, and markets beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. The company sells wine across various categories, including table wine, sparkling wine, and dessert wine. It provides beer primarily under the Corona Extra, Corona Light, Modelo Especial, Modelo Negra, Modelo Chelada, Pacifico, and Victoria brands, as well as Funky Buddha, Obregon Brewery, and Ballast Point brands.

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