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Bear of the Day: Constellation Brands (STZ)

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Key Takeaways

  • Constellation Brands lowered its full year guidance in Sep 2025.
  • STZ reiterated that lowered guidance after reporting Q2 of 2026 earnings.
  • Shares of STZ are near 5-year lows. It's cheap, with a forward P/E of 12.4.

Constellation Brands, Inc. (STZ - Free Report) is facing headwinds as consumers are drinking less alcohol. This Zacks Rank #5 (Strong Sell) is expected to see a double digit decline in earnings in Fiscal 2026.

Constellation Brands is a leading producer and marketer of beer, wine, and spirits. It has operations in the US, Mexico, New Zealand, and Italy.

It’s beer brands include the Corona Extra and Modelo Especial and others. It’s wine brands include Robert Mondavi Winery, Kim Crawford and others. Constellation’s craft spirits include Casa Noble Tequilla and High West Whiskey, among others.

Constellation Brands Beat in the Second Quarter 2026

On Oct 6, 2025, Constellation Brands reported its second quarter 2026 results and beat on the Zacks Consensus by $0.26. Earnings were $3.63 versus the Zacks Consensus of $3.37.

It has beat 2 out of the last 4 quarters.

Revenue was down 15% to $2.48 billion year-over-year. It continues to see a challenging macroeconomic environment. The consumer is spending less on alcoholic beverages.

Tariffs are hitting as operating margin declined 200 basis points due to the tariffs on aluminum.

Constellation Brands Reiterated September’s Lowered Guidance

On Sep 2, 2025, Constellation Brands surprised the Street with a business update. It cut its full year earnings and sales outlook. It reiterated that lowered outlook again with this earnings report.

Sales are due to decline 4% to 6% for the year. The analysts are more bearish, however. Zacks Consensus is looking for a decline of 11.1%.

Earnings guidance was lowered in September to $11.30 to $11.60 from $12.60 to $12.90. It kept that guidance.

The Zacks Consensus is looking for $11.50. That’s down 16.6% from last year when Constellation Brands made $13.78.

Here’s what the earnings look like on the 5-year price and consensus chart.

Zacks Investment Research
Image Source: Zacks Investment Research

Constellation Brands Shares Near 5-Year Lows

Shares of Constellation Brands have taken a tumble in 2025. It’s down 35.8% year-to-date and is near its 5-year lows.

That’s underperforming the S&P 500 which is up 14.8% in 2025.

Zacks Investment Research
Image Source: Zacks Investment Research

Constellation Brands is cheap. It has a forward price-to-earnings (P/E) ratio of 12.4. A P/E ratio under 15 can indicate a company is a value.  

It also has a low PEG ratio of just 0.4. A PEG ratio under 1.0 usually indicates a company has both growth and value.

Constellation Brands is shareholder friendly. It has repurchased $604 million in shares through Sep 2025. It also pays a dividend, which is currently yielding 2.9%.

For investors interested in a beverage company like Constellation Brands, you might want to wait on the sidelines for the macroeconomic environment to improve.  


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