Back to top

Analyst Blog

Zacks Equity Research

Constellation Brands (STZ) Q2 Earnings: A Surprise in Store?

NWL FAST STZ MDLZ

Trades from $3

Constellation Brands Inc. (STZ - Free Report) is slated to release second-quarter fiscal 2017 results on Oct 5. Last quarter, the company had delivered a positive earnings surprise of 1.99%.

In fact, it has outperformed the Zacks Consensus Estimate by an average of 8.9% over the trailing four quarters. Let’s see how things are shaping up for this announcement.

CONSTELLATN BRD Price and EPS Surprise

CONSTELLATN BRD Price and EPS Surprise | CONSTELLATN BRD Quote

Factors Influencing this Quarter

Constellation Brands has been gaining from its strategy of boosting growth via acquisitions, efforts to include new products in its wine and spirits businesses as well as strong demand for beer. The company’s top and bottom lines are benefiting from strength in the beer business, improving trends at its wine and spirits business, and solid overall depletion trends. This assisted the company to post its seventh straight earnings beat in the last reported quarter. Further, the company’s impressive outlook for fiscal 2017 reflects that it expects these robust trends to continue in the future.

While these factors make us hopeful of Constellation Brands’ upcoming results, we prefer to remain somewhat cautious, given the intense competition in the industry from other major players and the risk of increasing taxes.

Earnings Whispers

Our proven model does not conclusively show that Constellation Brands is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1, 2 or 3 for this to happen. This is not the case here, as you will see below:

Zacks ESP: Earnings ESP for Constellation Brands is currently 0.00%. This is because both the Most Accurate estimate and the Zacks Consensus Estimate are pegged at $1.66.

Zacks Rank: Constellation Brands carries a Zacks Rank #2 (Buy). Though a favorable Zacks Rank increases the predictive power of ESP, the company’s ESP of 0.00% makes surprise prediction difficult.

We caution against stocks with a Zacks Rank #4 or 5 (Sell-rated stocks) going into the earnings announcement, especially when the company is seeing negative estimate revisions.

Stocks Poised to Beat Earnings Estimates

Here are some companies you may want to consider as our model shows that these have the right combination of elements to post an earnings beat:

Fastenal Company (FAST - Free Report) , scheduled to report earnings on Oct 11, has an Earnings ESP of +2.22% and a Zacks Rank #3 (Hold).

Mondelez International Inc. (MDLZ - Free Report) , anticipated to report earnings on Oct 26, has an Earnings ESP of +2.33% and a Zacks Rank #3. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Newell Brands Inc. (NWL - Free Report) , expected to report earnings on Nov 4, has an Earnings ESP of +6.85% and a Zacks Rank #3.

Confidential from Zacks

Beyond this Analyst Blog, would you like to see Zacks' best recommendations that are not available to the public? Our Executive VP, Steve Reitmeister, knows when key trades are about to be triggered and which of our experts has the hottest hand. Click to see them now>>


In-Depth Zacks Research for the Tickers Above

Normally $25 each - click below to receive one report FREE:

NEWELL BRANDS (NWL) - free report >>

FASTENAL (FAST) - free report >>

CONSTELLATN BRD (STZ) - free report >>

MONDELEZ INTL (MDLZ) - free report >>