Positive commentary from Constellation Brands (NYSE:STZ) CEO Bill Newlands in late May raised the bar on its beer depletions, being the number of cases distributors sold to retailers, ahead of the company’s first quarter fiscal 2024 financial results on June 30, UBS analysts wrote in a note to clients.
They noted Constellation’s 1Q margins came in better than expected and the company delivered a “solid” earnings beat, although its beer depletions of 5.5% plus came in slightly below Visible Alpha consensus of 5.6% plus and marginally below buy side expectations.
“In our view much of the weakness (in Constellation’s stock price following the results) is likely a result of a soft start to the quarter in March,” the analysts wrote.
They added that Constellation Brands (NYSE:STZ) maintained its fiscal year 2024 guidance, with expected earnings per share (EPS) in the range of $11.70 to $12.00 (excluding its Canopy Growth stake) along with an anticipated 7% to 9% growth in net sales growth for beer and negative 0.5% to plus 0.5% organic wine and spirits growth.
Analysts at UBS have a ‘Buy’ rating on Constellation Brands stock and a 12-month target price of US$296.
Shares of Constellation Brands edged up 0.4% to $247.47 on Monday while gaining 9% in the year to date.
Contact Sean at sean@proactiveinvestors.com