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Constellation Brands' Pre-Q2 Earnings: Is It Poised to Beat Estimates?

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Key Takeaways

  • Constellation Brands is expected to post 3.6% revenue growth, while EPS is seen slipping 0.3%.
  • STZ's beer business may benefit from premiumization, Mexico capacity investments and share gains.
  • Constellation Brands faces uneven demand, weak Wine & Spirits sales, and inflation-driven cost pressures.

Constellation Brands, Inc. (STZ - Free Report) is scheduled to release second-quarter fiscal 2027 results on Oct. 6, 2026. The alcoholic beverage bigwig is expected to have recorded growth in its top line in the to-be-reported quarter.

The Zacks Consensus Estimate for the company’s fiscal second-quarter earnings is pegged at $3.62 per share, indicating a 0.3% decline from the year-ago quarter’s actual. The consensus mark has moved down by a penny in the past seven days. The consensus estimate for revenues is pegged at $2.57 billion, suggesting 3.6% growth from the prior-year quarter’s reported figure.

In the last reported quarter, the alcohol behemoth delivered an earnings surprise of 6.5%. Its bottom line beat estimates by 9.6%, on average, in the trailing four quarters.

Constellation Brands Inc Price and EPS Surprise

Constellation Brands Inc Price and EPS Surprise

Constellation Brands Inc price-eps-surprise | Constellation Brands Inc Quote

What the Zacks Model Says for STZ Stock

Our proven model does not conclusively predict an earnings beat for Constellation Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Constellation Brands currently has an Earnings ESP of -1.86% and a Zacks Rank #4 (Sell).

Key Factors to Note Before STZ’s Q2 Results

Constellation Brands’ second-quarter fiscal 2027 results are expected to reflect continued strength in its beer business. The company is expected to have benefited from its premiumization strategy and investments in its capacity expansion in Mexico. The beer business continues to outperform the category in dollar share gains.

Premiumization continues to reinforce the company’s premium positioning via disciplined investment, portfolio expansion and consumer-led marketing. The beer segment has also been experiencing gains from premiumization, driven by growth in traditional beer and flavored categories, including seltzers, flavored beer, RTD spirits and flavored malt beverages. The company is investing in its Power Brands through innovation and capitalizing on priority consumer trends with successful product introductions. 

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.

On the last reported quarter’s earnings call, management expressed confidence in the continued momentum of its beer, and wine & spirits businesses, with growth expected across both segments.

However, demand remains uneven as consumers react to fuel prices, inflation and tighter income. The company has been witnessing sluggishness in its Wine & Spirits business for a while now, as sales plunged 47% in the fiscal first quarter. Tariffs, product mix, marketing timing and Veracruz start-up costs may limit margin expansion.

High packaging and raw material costs from continued inflationary pressures, as well as increased depreciation and operating costs from brewery capacity expansions, are likely to have been concerning. This is expected to have impacted the operating income in the beer, and wine & spirits businesses.

STZ Stock’s Valuation Picture

From a valuation perspective, Constellation Brands offers an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 9.39X, which is below the five-year high of 18.33X and the Beverages - Alcohol industry’s average of 13.91X, the stock offers compelling value for investors seeking exposure to the alcohol beverages space.

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Image Source: Zacks Investment Research

The recent market movements show that STZ shares have lost 17.8% in the past three months compared with the industry's 6.7% decline.

Zacks Investment Research
Image Source: Zacks Investment Research

Stocks With Favorable Combination

Here are some companies, which, according to our model, have the right combination of elements to post an earnings beat this time around:

The Coca-Cola Company (KO - Free Report) presently has an Earnings ESP of +0.57% and a Zacks Rank #2. The company is expected to register top and bottom-line growth when it reports third-quarter 2026 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $12.9 billion, which indicates a rise of 4% from the figure reported in the prior-year quarter. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for quarterly earnings has moved by a penny in the past 30 days. The consensus mark for Coca-Cola earnings indicates growth of 6.1% from the year-ago quarter’s reported number. KO delivered an earnings surprise of 4.6%, on average, in the trailing four quarters.

Anheuser-Busch InBev (BUD - Free Report) currently has an Earnings ESP of +1.22% and a Zacks Rank #3. The Zacks Consensus Estimate for third-quarter 2026 EPS is pegged at $1.15, which implies an increase of 16.2% from the year-ago quarter’s actual. The consensus mark for EPS has been unchanged in the past 30 days.

The consensus mark for BUD’s quarterly revenues is pegged at $16.3 billion, which indicates growth of 7.6% from the figure reported in the prior-year quarter. BUD delivered a trailing four-quarter earnings surprise of 6.3%, on average.

Corteva Inc. (CTVA - Free Report) currently has an Earnings ESP of +19.35% and a Zacks Rank #3. The company is expected to register growth in its top line when it reports third-quarter 2026 results. The Zacks Consensus Estimate for CTVA’s quarterly loss per share has narrowed by a penny in the past 30 days to a loss of 41 cents per share. The consensus estimate for earnings indicates a 78.3% decline from the year-ago quarter's number.

The Zacks Consensus Estimate for Corteva’s quarterly revenues is pegged at $2.6 billion, implying a rise of 0.6% from the figure reported in the prior-year quarter. CTVA delivered an earnings surprise of 21.9%, on average, in the trailing four quarters.

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