We use cookies to understand how you use our site and to improve your experience.
This includes personalizing content and advertising.
By pressing "Accept All" or closing out of this banner, you consent to the use of all cookies and similar technologies and the sharing of information they collect with third parties.
You can reject marketing cookies by pressing "Deny Optional," but we still use essential, performance, and functional cookies.
In addition, whether you "Accept All," Deny Optional," click the X or otherwise continue to use the site, you accept our Privacy Policy and Terms of Service, revised from time to time.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Constellation Brands' Modelo, Corona and Pacifico drive pricing power and margin resilience.
Premium wine and spirits Power Brands like The Prisoner and Kim Crawford are poised to fuel growth.
Constellation Brands, Inc. (STZ - Free Report) appears to be seeing tangible benefits from its premium-focused strategy, even in a challenging macro backdrop. In third-quarter fiscal 2026, the company delivered an earnings beat despite year-over-year revenue pressure, underscoring the resilience of its high-end beer portfolio. Strong brand equity, particularly across Modelo, Corona and Pacifico, continues to support pricing power and margin discipline.
Premiumization is further supported through price-pack architecture, including the rollout of smaller 7-ounce formats to address affordability concerns. Management highlighted improved trends for Modelo Oro and Corona Premier following price adjustments aimed at aligning with consumer expectations, suggesting that thoughtful price-pack architecture can protect both volumes and brand perception. Meanwhile, Pacifico’s growing distribution and share gains reflect the success of investing behind differentiated, premium brands with strong social and on-premise momentum.
Additionally, the success of its premiumization strategy is demonstrated by the accelerated growth of its Power Brands. The Wine and Spirits business has been transitioning its portfolio toward higher-end brands that align better with consumer-led premiumization trends. Key growth drivers included the company's high-end Power Brands, such as The Prisoner Brand Family, Kim Crawford and Meiomi. The company is investing in its Power Brands through innovation and capitalizing on priority consumer trends with successful product introductions.
That said, macroeconomic pressure, particularly among Hispanic consumers, remains a headwind for category growth. However, Constellation Brands’ focus on “controlling the controllables” — distribution expansion, disciplined pricing and targeted marketing — is helping it outperform the broader beer category.
Overall, while near-term volatility persists, the company’s premiumization strategy is reinforcing brand strength, supporting margins and positioning it to capture upside in key consumption moments like major sporting events.
The Zacks Rundown for STZ
In the past three-month period, STZ’s shares have gained 19.8% compared with the industry’s growth of 21.3%. STZ presently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
From a valuation standpoint, STZ trades at a forward price-to-earnings ratio of 12.63X, lower than the industry’s average of 16.57X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for STZ’s fiscal 2026 earnings implies a year-over-year decline of 15.5%, while the same for fiscal 2027 earnings suggests year-over-year growth of 6.5%.
Image Source: Zacks Investment Research
Key Picks
Some better-ranked stocks have been discussed below:
The Zacks Consensus Estimate for CABGY's current fiscal-year sales and earnings indicates growth of 34.9% and 17.8%, respectively.
Anheuser-Busch InBev SA/NV (BUD - Free Report) , produces and sells beer in North America, Middle Americas, South America, Europe, the Middle East, Africa, and the Asia Pacific. BUD currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for BUD's current fiscal-year sales and earnings indicates growth of 5.5% and 10.7%, respectively. BUD delivered a trailing four-quarter earnings surprise of 4%, on average.
Heinyken N.V. (HEINY - Free Report) is engaged in producing and distributing beverages. HEINY currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Mission HEINY's current fiscal-year sales implies a decline of 10.4%, and the same for current fiscal-year earnings implies growth of 14.1% from the year-ago actuals.
Zacks' 7 Best Strong Buy Stocks (New Research Report)
Valued at $99, click below to receive our just-released report
predicting the 7 stocks that will soar highest in the coming month.
View the Zacks #1 Rank List
Image: Bigstock
Is Constellation Brands' Premiumization Strategy Paying Off?
Key Takeaways
Constellation Brands, Inc. (STZ - Free Report) appears to be seeing tangible benefits from its premium-focused strategy, even in a challenging macro backdrop. In third-quarter fiscal 2026, the company delivered an earnings beat despite year-over-year revenue pressure, underscoring the resilience of its high-end beer portfolio. Strong brand equity, particularly across Modelo, Corona and Pacifico, continues to support pricing power and margin discipline.
Premiumization is further supported through price-pack architecture, including the rollout of smaller 7-ounce formats to address affordability concerns. Management highlighted improved trends for Modelo Oro and Corona Premier following price adjustments aimed at aligning with consumer expectations, suggesting that thoughtful price-pack architecture can protect both volumes and brand perception. Meanwhile, Pacifico’s growing distribution and share gains reflect the success of investing behind differentiated, premium brands with strong social and on-premise momentum.
Additionally, the success of its premiumization strategy is demonstrated by the accelerated growth of its Power Brands. The Wine and Spirits business has been transitioning its portfolio toward higher-end brands that align better with consumer-led premiumization trends. Key growth drivers included the company's high-end Power Brands, such as The Prisoner Brand Family, Kim Crawford and Meiomi. The company is investing in its Power Brands through innovation and capitalizing on priority consumer trends with successful product introductions.
That said, macroeconomic pressure, particularly among Hispanic consumers, remains a headwind for category growth. However, Constellation Brands’ focus on “controlling the controllables” — distribution expansion, disciplined pricing and targeted marketing — is helping it outperform the broader beer category.
Overall, while near-term volatility persists, the company’s premiumization strategy is reinforcing brand strength, supporting margins and positioning it to capture upside in key consumption moments like major sporting events.
The Zacks Rundown for STZ
In the past three-month period, STZ’s shares have gained 19.8% compared with the industry’s growth of 21.3%. STZ presently carries a Zacks Rank #3 (Hold).
Image Source: Zacks Investment Research
From a valuation standpoint, STZ trades at a forward price-to-earnings ratio of 12.63X, lower than the industry’s average of 16.57X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for STZ’s fiscal 2026 earnings implies a year-over-year decline of 15.5%, while the same for fiscal 2027 earnings suggests year-over-year growth of 6.5%.
Image Source: Zacks Investment Research
Key Picks
Some better-ranked stocks have been discussed below:
Carlsberg A/S (CABGY - Free Report) , a brewing company, has operations in Northern & Western Europe, Eastern Europe and Asia. CABGY currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for CABGY's current fiscal-year sales and earnings indicates growth of 34.9% and 17.8%, respectively.
Anheuser-Busch InBev SA/NV (BUD - Free Report) , produces and sells beer in North America, Middle Americas, South America, Europe, the Middle East, Africa, and the Asia Pacific. BUD currently carries a Zacks Rank #2 (Buy).
The Zacks Consensus Estimate for BUD's current fiscal-year sales and earnings indicates growth of 5.5% and 10.7%, respectively. BUD delivered a trailing four-quarter earnings surprise of 4%, on average.
Heinyken N.V. (HEINY - Free Report) is engaged in producing and distributing beverages. HEINY currently carries a Zacks Rank #2.
The Zacks Consensus Estimate for Mission HEINY's current fiscal-year sales implies a decline of 10.4%, and the same for current fiscal-year earnings implies growth of 14.1% from the year-ago actuals.