Constellation Brands Inc.
) soared to a new 52-week high of $44.99 on Monday, Feb 25, as
the company continues to gain from the sturdy third-quarter
fiscal 2013 performance and a strong outlook. Further, a
consistent rise in volumes traded is driving the stock up the
charts of late. Average volume of shares traded over the last 3
months stands at approximately 4,456,360.
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This Zacks Rank #2 (Buy) beverage company closed trade at $43.97
on Feb 25, representing a solid year-to-date return of
approximately 17.0%, while gaining about 103.0% over the past
Drivers That Triggered Momentum
An impressive record of beating the quarterly earnings
expectations, an upbeat fiscal 2013 outlook, a sustained focus on
brand building as well as initiatives to introduce new products
in its wine and spirits business, are the major attributes that
pushed the shares of Constellation Brands to a new high.
The recent third-quarter fiscal 2013 results have added to its
streak of upbeat performances. Constellation Brands posted
adjusted earnings of 63 cents per share that surged over 21% from
the year-ago quarter and surpassed the Zacks Consensus Estimate
of 55 cents, primarily driven by increased sales and improved
Net sales in the quarter increased 9% to $766.9 million from the
year-ago quarter and also came ahead of the Zacks Consensus
Estimate of $744.0 million. Net sales were gained on the back of
higher volumes and better product mix.
Bolstered by strong quarterly performance, the company raised its
fiscal 2013 adjusted earnings guidance to a range of $2.10 to
$2.20 per share, up from the earlier projection of $2.00 to
Further, we believe that Constellation Brands' continued focus on
brand building and enhancing market share through acquisitions
are accelerating its growth opportunities. During calendar year
2012, Constellation Brands acquired the remaining 50% stake in
Crown and the California-based Mark West wine brand.
Another beverage-alcohol company that created a new 52-week high
Companhia de Bebidas Das Americas
, or AmBev (
). Besides this, other stocks in the retail space soaring
to their all time highs are
The Clorox Company
Stock's Key Indicators
From the valuation perspective, Constellation Brands looks
compelling. The stock currently trades at a forward P/E of 20.2x,
at par with the peer group average. Similarly, both price-to-book
and price-to-sales ratios stand at 2.9, in line with the peer
Moreover, the company's return-on-equity (ROE) and
return-on-asset (ROA) are 17.9% and 6.1%, respectively, which are
higher than the peer group averages. The company's strong
fundamentals are well supported by its long-term estimated EPS
growth rate of 10.9%.