Constellation Brands Hits 52-Week High - Analyst Blog
Shares of Constellation Brands Inc. ( STZ ) reached a new 52-week high of $84.33 yesterday and closed the trading session at $83.95. Apart from strong third-quarter fiscal 2014 results and an upbeat guidance, the company has been performing well on the back of brand building and inorganic growth strategies. Notably, the stock price of this beverage company rose approximately 21.2% year-to-date.
The average volume of shares traded over the last 3 months was approximately 1,513K. Moreover, the company currently trades at a forward P/E of 21.1x, slightly higher than the peer group average of 21.06x. Further, the company's long-term estimated earnings per share (EPS) growth rate of 16.5% is substantially higher than the peer group average of 7.8%.
Investors are optimistic about this Zacks Rank #3 (Hold) stock after it posted EPS of $1.10 on Jan 8, which handily surpassed the Zacks Consensus Estimate of 91 cents and rose 74.6% year over year. Constellation Brands reported net sales of $1,443.3 million, marking a rise of 88.2% from the prior-year quarter and handily beating the Zacks Consensus Estimate of $1,386 million.
The year-over-year top-line growth was primarily attributable to complete consolidation of the Crown Import business. Moreover, Constellation Brand's history of positive earnings surprises makes investors bullish about the stock. We observe that the company has beaten the Zacks Consensus Estimate in the past 3 out of 4 quarters by an average of 6.5%.
Constellation Brands' sustained focus on brand building and introduction of new products in the wine and spirits business are the major factors behind the stock's momentum. Additionally, last year, the company acquired the Grupo Modelo SAB de C.V.'s U.S. beer business, which included full ownership of Crown Imports from Anheuser-Busch InBev SA/NV ( BUD ). Moreover, Constellation Brands is enhancing its distribution channels in retail and effectively implementing strategic merchandising initiatives to augment sales.
Considering the positive impact from the full consolidation of Grupo Modelo and strong third-quarter results, management raised its guidance for fiscal 2014. Constellation Brands expects fiscal 2014 adjusted earnings to be in the range of $3.10-$3.20 per share, compared with $2.80-$3.10 projected earlier. Currently, the Zacks Consensus Estimate stands at $3.19, which lies near the higher end of the guidance range.
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