On Jan 22, we upgraded the largest wine company in the world,
Constellation Brands Inc. (
to Outperform based on the company's strong third quarter fiscal
2013 results and increased visibility on the Crown deal, which is
expected to close during the first quarter of calendar year
Why the Upgrade?
Constellation Brands posted another strong quarter, with a
positive earnings surprise of 14.6%. The company's third-quarter
earnings came in at 63 cents a share, up 21% from the year-ago
quarter's earnings, marking the fourth consecutive quarter of
positive earnings surprises with an average beat of 32.5%.
Following the strong results, the company raised its fiscal 2013
adjusted earnings guidance to $2.10-$2.20 per share from its
earlier projection of $2.00-$2.10 per share.
Following the release of third quarter results, the Zacks
Consensus Estimate for the fourth quarter and fiscal 2013
increased by 7.1% and 4.8% to 45 cents and $2.18,
The strong positive bias on this Zacks Rank #2 (Buy) company
comes from its continued focus on brand building initiatives and
product innovations in its wine and spirits business. These
efforts are expected to drive the company's revenues. Owing to
its strategic endeavors, the company is witnessing robust
depletion trends and increasing market share in the U.S. wine and
spirits category. Moreover, the company is enhancing its points
of distribution at retail and is well executing its strategic
merchandising initiatives that will facilitate it to augment
Other Stocks to Consider
Besides Constellation Brands, other stocks in the beer and
wine industry that are performing well include
Boston Beer Co. Inc
Compania Cervecerias Unidas S.A.
), both carrying a Zacks Rank #1 (Strong Buy).
), which holds a Zacks Rank #2, is also worthy of a
BROWN FORMAN B (BF.B): Free Stock Analysis
CERV UNIDAS-ADR (CCU): Free Stock Analysis
BOSTON BEER INC (SAM): Free Stock Analysis
CONSTELLATN BRD (STZ): Free Stock Analysis
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