What's In Store For Constellation Brands (STZ) In Q3 Earnings?

Constellation Brands, Inc. (NYSE:STZ) is scheduled to release third-quarter fiscal 2020 results on Jan 8, 2020. In the last reported quarter, the leading wine company delivered a positive earnings surprise of 4.2%. Moreover, its bottom line beat estimates by 8.7%, on average, over the trailing four quarters.

The Zacks Consensus Estimate for the company’s fiscal third-quarter earnings stands at $1.90, indicating a 19.8% decline from the year-ago quarter’s reported figure. Further, the consensus mark has moved down by a penny in the past 30 days. For third-quarter revenues, the consensus mark is pegged at $1.95 billion, suggesting a 0.9% decrease from the prior-year quarter’s reported figure.

Key Factors to Note

Constellation Brands has been delivering strong performance, evident from its consistent earnings record. Strength in its beer business has been a key growth driver, with higher depletions and shipment volume. Solid portfolio depletions and market share gains, stemming from continued strength in the Modelo and Corona brand families, are likely to have aided the top line in the to be reported quarter.

The company is also poised to gain from the exposure in the cannabis space, with its investment in Canopy Growth. Furthermore, its constant brand-building efforts, acquisitions and innovation are commendable. Its innovation and marketing efforts are well-recognized in the beverage market. Gains from these efforts are likely to get reflected in the company’s performance in third-quarter fiscal 2020.

However, softness in the company’s wine & spirits business has been significantly weighing on these positive factors. Lower shipment volumes and depletions are likely to have hurt the segment’s sales in the fiscal third quarter.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Constellation Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Although Constellation Brands carries a Zacks Rank #3, its Earnings ESP of -3.07% makes surprise prediction difficult.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to deliver an earnings beat:

Boot Barn Holdings, Inc (NYSE:BOOT) has an Earnings ESP of +1.47%. It currently sports a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.

Target Corporation (NYSE:TGT) has an Earnings ESP of +0.24%. It presently flaunts a Zacks Rank #1.

The Procter & Gamble Company (NYSE:PG) currently has an Earnings ESP of +0.91% and a Zacks Rank #2.

Today's Best Stocks from Zacks

Would you like to see the updated picks from our best market-beating strategies? From 2017 through Q3 2019, while the S&P 500 gained +39.6%, five of our strategies returned +51.8%, +57.5%, +96.9%, +119.0%, and even +158.9%.

This outperformance has not just been a recent phenomenon. From 2000 – Q3 2019, while the S&P averaged +5.6% per year, our top strategies averaged up to +54.1% per year.

See their latest picks free >>