Back to top

Analyst Blog

Constellation Brands Inc.’s (STZ - Free Report) shares crafted a new 52-week high of $50.34 on Friday, May 3. This alcoholic beverage company eventually closed at $50.21, up 0.6% from the previous day’s session and generated a year-to-date return of approximately 33.7%. This Zacks Rank #2 (Buy) company currently trades at a forward P/E of 17.66x, a 5.5% discount to the peer group average of 18.69x.

A record of beating quarterly earnings expectations, sustained focus on brand building as well as initiatives to introduce new products in its wine and spirits business, are the major forces that drove the company’s shares to a new high. The average volume of shares traded over the last 3 months is approximately 4,099K.

The recent fourth-quarter fiscal 2013 results have added to its upbeat performances. Constellation Brands posted adjusted earnings of 47 cents per share, surpassing the Zacks Consensus Estimate by a couple of cents. In the last 4 quarters, the company beat the Zacks Consensus Estimates by an average of 13.3%.

Net sales in the quarter increased 11% to $695.9 million from the year-ago quarter and surpassed the Zacks Consensus Estimate of $667.0 million. Net sales gained on the back of higher volumes and better product mix in the wine and spirits business, coupled with benefits from the Mark West acquisition.

Bolstered by a better-than-expected quarterly performance, the company expects its fiscal 2014 adjusted earnings in the range of $2.55–2.85 per share compared with $2.19 per share reported in fiscal 2013.

Further, we believe that Constellation Brands with its formidable portfolio of well-known brands, new product offerings and strategic initiatives to strengthen its foothold in the U.S., holds a promising future. Moreover, the company is enhancing its points of distribution in retail and is well executing its strategic merchandising initiatives, which will bolster sales.

Simultaneously, companies such as Beam, Inc. , Newell Rubbermaid Inc. (NWL - Free Report) and Dean Foods Company (DF - Free Report) achieved new 52-week highs of $68.17, $27.00 and $19.57, respectively, on Friday, May 3.


In-Depth Zacks Research for the Tickers Above

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

Constellation Brands Inc (STZ) - free report >>

Newell Brands Inc. (NWL) - free report >>

Dean Foods Company (DF) - free report >>