RBC Capital Markets analysts believe Constellation Brands Inc (NYSE:STZ)’s earnings per share “aftermath was better than feared” but expect the numbers to be rangebound until the company’s volumes gain momentum.
In a note to clients on Wednesday, the analysts called Constellation’s overall quarter “solid” given the muted expectations and poor investor sentiment.
They added that the company’s beer depletions remain “challenging,” weighed down by macro factors, but that beer margins were notably stronger despite volume pressure and the analyst “feel good” about the beer margins’ trajectory.
RBC analysts maintained their target price of $200 per share on Constellation Brands stock, while reiterating their ‘Outperform’ rating, but acknowledged that “patience is needed”.
Constellation Brands shares rose 2.6% to $143.74 in midday trading on Wednesday.