Constellation Brands (STZ) Plunges More Than Broader Markets: What You Need to Know

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VSStellation Brands (STZ) closed at $215.85 last trading session, marking a -1.38% move from the previous day. That move lagged the S&P 500’s daily 0.72% loss. Meanwhile, the Dow lost 0.68% and the Nasdaq, a technology-heavy index, lost 0.66%.

Prior to today’s trading, shares of the wine, liquor and beer company were down 10.08% in the past month. This was lower than the Consumer Staples sector’s 2% loss and the S&P 500’s 5.92% loss during this period.

Constellation Brands will be looking to show strength ahead of its next earnings release. On that day, Constellation Brands is expected to post earnings of $2.18 per share, which would represent 19.78% year-over-year growth. Meanwhile, Zacks’ consensus estimate for revenue calls for net sales of $2.02 billion, up 3.41% from the year-ago period.

Zacks consensus estimates for the full year for STZ call for earnings of $10.11 per share and revenue of $8.74 billion. These results would represent year-over-year variations of +1.4% and +1.42%, respectively.

Investors might also notice recent changes in analyst estimates for Constellation Brands. These revisions help show the ever-changing nature of short-term trading trends. Thus, positive revisions to estimates reflect analysts’ optimism about the company’s business and profitability.

Our research shows that these estimate changes are directly correlated to short-term stock prices. We developed the Zacks Rank to capitalize on this phenomenon. Our system takes into account these estimation changes and provides a clear and actionable scoring model.

The Zacks ranking system ranges from #1 (strong buy) to #5 (strong sell). It has a remarkable, externally audited track record of success with #1 stocks delivering an average annual return of +25% since 1988. Over the past 30 days, our consensus EPS projection has remained stagnant. Constellation Brands currently sports a Zacks rank of #3 (Hold).

In terms of valuation, Constellation Brands is currently trading at a Forward P/E ratio of 21.66. This represents a discount to the average PER of its sector of 24.46.

It should also be noted that STZ currently has a PEG ratio of 2.42. This measure is used in the same way as the famous P/E ratio, but the PEG ratio also takes into account the growth rate of the stock’s expected earnings. The liquor industry currently had an average PEG ratio of 2.4 at yesterday’s close.

The Beverages – Alcohol industry is part of the Consumer Staples sector. This group has a Zacks Industry Rank of 194, which places it in the bottom 24% of all 250+ industries.

The Zacks Industry Ranking assesses the strength of our industry groups by measuring the average Zacks Ranking of individual stocks within the groups. Our research shows that the top 50% of industries outperform the bottom half by a factor of 2 to 1.

Be sure to use Zacks.com to track all of these stock movement metrics, and more, in future trading sessions.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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