BofA upgraded Constellation Brands to ‘Neutral’ from ‘Underperform’ and raised its price target to $160 from $120.
- BofA said its near-term estimates remain unchanged and that the rating change is based solely on valuation multiples, according to The Fly.
- In its second-quarter fiscal 2027 results, reported on October 6, Constellation Brands’ beer business posted a 5% increase in net sales and a 1% rise in operating income.
- Fourteen of 24 analysts covering the stock rate it ‘Buy’ or ‘Strong Buy’, whereas eight rate the stock ‘Hold’ and two rate it ‘Strong Sell’, according to Koyfin Data.
Constellation Brands (STZ) was in focus on Wednesday after Bank of America (BofA) upgraded the stock, citing a reduced risk of further tightening in immigration backdrop under Democratic control of Congress.
According to The Fly, BofA raised its price target to $160 from $120 and upgraded the stock to ‘Neutral’ from ‘Underperform’.
STZ shares traded 7.6% higher at the time of writing.
According to Koyfin data, 14 of 24 analysts covering the stock rate it ‘Buy’ or ‘Strong Buy’, whereas eight rate the stock ‘Hold’ and two rate it ‘Strong Sell’. Their 12-month price target ranges from $99 to $209, with an average of $151.17.
BofA’s Upgrade Is Based On Valuation
BofA said its near-term estimates remain unchanged and that the rating change is based solely on valuation multiples, according to The Fly.
Meanwhile, Seeking Alpha reported that BofA sees immigration as less likely to become an additional headwind for Constellation’s beer volumes. The analyst said the timing and magnitude of any policy changes remain uncertain.
Constellation Brands’ Beer Business Remains In Focus
Constellation Brands posted stronger-than-expected results for its second quarter of fiscal 2027 after the market closed on October 6. The company reported net sales rising 6% year-over-year to $2.63 billion, while comparable earnings came in at $3.74 per share, beating analyst estimates.
Its beer business continued to drive growth, with net sales up 5% and operating income increasing 1%. The company also gained market share in U.S. tracked channels, with beer volume and dollar share both outperforming the broader category.
However, consumer spending pressures remain a challenge. Constellation reaffirmed its fiscal 2027 comparable earnings outlook of $11.20 to $11.90 per share and updated its reported earnings forecast to $11.85 to $12.55 per share.
The company has also been expanding beyond its core beer portfolio. In October, it announced the acquisition of SpikedAde, a vodka-based ready-to-drink beverage brand, for $75 million upfront, with up to an additional $278 million in contingent payments over five years.
How Retail Views STZ
On Stocktwits, retail sentiment around the stock remained in ‘bearish’ territory in the past 24 hours.
STZ shares have gained over 6.8% year-to-date.
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