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Constellation Brands, Inc.

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Constellation Brands outpaced the industry in the past year driven by a robust surprise history. Though the company missed earnings estimates in first-quarter fiscal 2019 due to higher marketing expenses and transportation costs, it delivered earnings beat in the preceding 14 quarters. Further, the company is witnessing solid top-line trends driven by strong depletions in the beer business. Notably, the fiscal first quarter results reflected the 9th sales beat in last 11 quarters. Consequently, management raised its GAAP earnings view for fiscal 2019. Also, the company is benefiting from consistent focus on brand-building efforts and product innovations. However, the market remains concerned about the outcome of the company’s recent $5 billion investment to expand stake in Canada’s Canopy Growth. Moreover, stiff competition, higher debt position and taxes remain concerns.

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