What Awaits Constellation Brands (STZ) In Q1 Earnings?

Constellation Brands Inc. (NYSE:STZ) is slated to release first-quarter fiscal 2017 results on Jun 30. Last quarter, the company had delivered a positive earnings surprise of 4.4%. In fact, it has outperformed the Zacks Consensus Estimate by an average of 9.2% over the trailing four quarters. Let’s see how things are shaping up for this announcement.

Factors Influencing this Quarter

Constellation Brands has been gaining from its strategy of boosting growth via acquisitions, efforts to include new products in its wine and spirits businesses as well as strong demand for beer. The company’s top and bottom lines are benefiting from strength in the beer business, improving trends at its wine and spirits business, and solid overall depletion trends. Further, the company’s impressive outlook for fiscal 2017 reflects that it expects these robust trends to continue in the future.

While these factors make us hopeful of Constellation Brands’ upcoming results, we prefer to remain somewhat cautious, given the intense competition in the industry from other major players and the risk of increasing taxes.

Earnings Whispers

Our proven model does not conclusively show that Constellation Brands is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:

Zacks ESP: Earnings ESP for Constellation Brands is currently pegged at +1.97%. This is because the Most Accurate estimate of $1.55 stands above the Zacks Consensus Estimate of $1.52.

Zacks Rank: Constellation Brands carries a Zacks Rank #4 (Sell). We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

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 post an earnings beat:

Lithia Motors Inc. (NYSE:LAD) , expected to report earnings on Jul 27, has an Earnings ESP of +2.04% and a Zacks Rank #3 (Hold).

AutoNation, Inc. (NYSE:AN) , expected to report earnings on Jul 27, has an Earnings ESP of +0.95% and a Zacks Rank #3.

Blue Nile Inc. (NASDAQ:NILE) , expected to report earnings on Aug 5, has an Earnings ESP of +5.00% and a Zacks Rank #3.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days.Click to get this free report >>