Breaking News
Get Actionable Insights with InvestingPro+: Start 7 Day FREE Trial Register here
Investing Pro 0
Ad-Free Version. Upgrade your Investing.com experience. Save up to 40% More details

Constellation Brands Falls Despite Earnings, Revenue Beat - Analysts Weigh in

Stock Markets Jun 30, 2022 12:45PM ET
Saved. See Saved Items.
This article has already been saved in your Saved Items
 
© Reuters. Constellation Brands (STZ) Falls Despite Earnings, Revenue Beat - Analysts Weigh In

By Sam Boughedda

Constellation Brands (NYSE:STZ) reported first-quarter earnings before the bell Thursday.

The company reported earnings of $2.66 per share, $0.13 better than the analyst estimate of $2.53. Revenue also beat expectations, coming in at $2.36 billion versus the consensus estimate of $2.16 billion.

Constellation Brands sees fiscal 2023 earnings per share between $11.20 to $11.50 versus the consensus of $11.06.

Despite an initial rise premarket, shares are down more than 3% at the time of writing.

Wall Street analysts had their say on the report following its release:

"TZ reported a very strong start to the year with FQ1 results that handily beat our/cons estimates both on the top/bottom lines. Investor expectations going into the quarter were high, and STZ's results easily lived up to those expectations. Despite the big Q1 beat, mgmt reaffirmed guidance we believe to be conservative given the outsized beer results in Q1 puts our/cons FY23 estimates well above full year guidance," said Goldman Sachs analyst Bonnie Herzog.

Barclays analyst Lauren Lieberman says the company has typically been conservative, but the outlook implies a “very significant deceleration.”

“The high end of the guidance range for sales could suggest low single digit shipments (if 1Q’s price/mix holds) for the balance of the year and on the bottom line, the ~20c benefit from this quarter’s beat and the stronger share repurchase is nowhere to be found,” she added.

UBS analyst Peter Grom, who has a Buy rating and $270 price target on the stock, said the report was "Slightly Positive/Neutral."

"Against that backdrop, we think the quarter largely played out as expected as beer depletion growth came in stronger than expected (with most of the sales upside coming from beer shipments ahead of depletions) and more than offset a slight gross margin miss for the quarter. While some may be disappointed that guidance didn't move higher this morning (particularly given the upside in the quarter and a lower share count), at this point we believe this is simply a prudent approach from management given the evolving consumer landscape, rather than a sign that trends are beginning to deteriorate," wrote Grom.

Nik Modi at RBC Capital currently has an Outperform rating and a $300 per share price target on the stock. He told investors that "through a combination of share gains, contribution from innovation, distribution wins and narrowing price gaps between domestic premium and Corona/Modelo Especial, we continue to believe STZ can compound its beer top line at 7-9% rate over the next 3 years (with a bias to the upside). While we believe margins also have upside, we think STZ will focus on a top-line driven value creation model (investing heavily behind its brands)."

Evercore ISI analyst Robert Ottenstei also has an Outperform rating on the stock, with a $285 price target. He said beer shipments drove quarter upside, and there was robust import momentum. "Beer OI beat by 11.8% at $763M vs. $682M consensus, while Wine & Spirits OI missed consensus by 16.9% at $91M vs. $109M consensus, driven by increased cost pressures as shipment volumes of +1.5% were ahead of Street -3.4%. Beer depletions +8.7% vs. +7.4% consensus as import momentum remained strong, with Modelo Especial +15%, Corona Extra +4%, and Pacifico +21%. Beer shipments, which drive the P&L."

Finally, Morgan Stanley analyst Dara Mohsenian, who has an Overweight rating and $298 price target on the stock, said: "STZ reported Q1 EPS of $2.90, above the $2.70 consensus, driven by beer topline and margin upside, offset partially by wine margin (profit) downside, and maintained FY EPS guidance, despite an incremental repurchase benefit worth 1.3% to shares, which we think is offset by higher digital spend investments in the corporate line."

Constellation Brands Falls Despite Earnings, Revenue Beat - Analysts Weigh in
 

Related Articles

European Stock Futures Mixed; Chinese Economy Slows
European Stock Futures Mixed; Chinese Economy Slows By Investing.com - Aug 15, 2022 1

By Peter Nurse  Investing.com - European stock markets are expected to open in a mixed fashion Monday, starting the week on a cautious note amid concerns about slowing global...

Add a Comment

Comment Guidelines

We encourage you to use comments to engage with other users, share your perspective and ask questions of authors and each other. However, in order to maintain the high level of discourse we’ve all come to value and expect, please keep the following criteria in mind:  

  •            Enrich the conversation, don’t trash it.

  •           Stay focused and on track. Only post material that’s relevant to the topic being discussed. 

  •           Be respectful. Even negative opinions can be framed positively and diplomatically. Avoid profanity, slander or personal attacks directed at an author or another user. Racism, sexism and other forms of discrimination will not be tolerated.

  • Use standard writing style. Include punctuation and upper and lower cases. Comments that are written in all caps and contain excessive use of symbols will be removed.
  • NOTE: Spam and/or promotional messages and comments containing links will be removed. Phone numbers, email addresses, links to personal or business websites, Skype/Telegram/WhatsApp etc. addresses (including links to groups) will also be removed; self-promotional material or business-related solicitations or PR (ie, contact me for signals/advice etc.), and/or any other comment that contains personal contact specifcs or advertising will be removed as well. In addition, any of the above-mentioned violations may result in suspension of your account.
  • Doxxing. We do not allow any sharing of private or personal contact or other information about any individual or organization. This will result in immediate suspension of the commentor and his or her account.
  • Don’t monopolize the conversation. We appreciate passion and conviction, but we also strongly believe in giving everyone a chance to air their point of view. Therefore, in addition to civil interaction, we expect commenters to offer their opinions succinctly and thoughtfully, but not so repeatedly that others are annoyed or offended. If we receive complaints about individuals who take over a thread or forum, we reserve the right to ban them from the site, without recourse.
  • Only English comments will be allowed.

Perpetrators of spam or abuse will be deleted from the site and prohibited from future registration at Investing.com’s discretion.

Write your thoughts here
 
Are you sure you want to delete this chart?
 
Post
Post also to:
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Thanks for your comment. Please note that all comments are pending until approved by our moderators. It may therefore take some time before it appears on our website.
 
Are you sure you want to delete this chart?
 
Post
 
Replace the attached chart with a new chart ?
1000
Your ability to comment is currently suspended due to negative user reports. Your status will be reviewed by our moderators.
Please wait a minute before you try to comment again.
Add Chart to Comment
Confirm Block

Are you sure you want to block %USER_NAME%?

By doing so, you and %USER_NAME% will not be able to see any of each other's Investing.com's posts.

%USER_NAME% was successfully added to your Block List

Since you’ve just unblocked this person, you must wait 48 hours before renewing the block.

Report this comment

I feel that this comment is:

Comment flagged

Thank You!

Your report has been sent to our moderators for review
Continue with Google
or
Sign up with Email