Constellation Touches All-Time High - Analyst Blog

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Shares of Constellation Brands Inc. ( STZ ) soared to a new 52-week high of $45.92 on Friday, Mar 15, as the company continues to gain from 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 4,827,380. Moreover, the stock currently trades at a forward P/E of 17.2x, at a discount of 13.1% from the peer group average of 19.8x.

This Zacks Rank #3 (Hold) alcoholic beverage company closed trade at $45.75 on Mar 15, representing a solid year-to-date return of approximately 21.8%, while gaining about 101.6% over the past one year.

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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 margins.

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. The hike was driven by 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-$2.20 per share, up from the earlier projection of $2.00-$2.10. The current Zacks Consensus Estimate stands at $2.18 per share, which is closer to the company's higher-end guidance range.

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 Calif.-based Mark West wine brand.

Another beverage-alcohol company that created a new 52-week high recently was Companhia de Bebidas Das Americas , or AmBev ( ABV ). Besides this, other stocks in the retail space soared to all-time highs in recent weeks are The Clorox Company ( CLX ) and Colgate-Palmolive Co. ( CL ).



AMBEV-PR ADR (ABV): Free Stock Analysis Report

COLGATE PALMOLI (CL): Free Stock Analysis Report

CLOROX CO (CLX): Free Stock Analysis Report

CONSTELLATN BRD (STZ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Stocks

Referenced Stocks: ABV , CL , CLX , STZ

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