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Constellation Brands an Investor Favorite, Now a Strong Buy

On Oct 13, 2015, Zacks Investment Research upgraded Constellation Brands Inc.STZ to a Zacks Rank #1 (Strong Buy).

Why the Upgrade?

Constellation Brands has been a favorite pick for investors given its solid brand portfolio, strategic growth initiatives, impressive earnings trend and robust financials. Moreover, shares of this leading international producer and marketer of beverage alcohol brands have soared nearly 37% year to date.

Speaking of Constellation Brands' earnings surprise trend, we note that the company delivered its fourth consecutive earnings beat in the recently reported second-quarter fiscal 2016. The quarter marked an improvement in both top and bottom line results, which also exceeded estimates. Results were backed by continued strength in the company's beer business, improving trends at its wine and spirits business, and solid overall depletion trends.

The impressive results also encouraged management to raise its outlook for the fiscal year, following which the Zacks Consensus Estimate for fiscal 2016 is trending upward, climbing 2.6% to $5.14 per share, over the past 30 days. This indicates that analysts have become more constructive on the stock's performance.

Constellation Brands occupies a predominant position in the premium wine and beer segment in the U.S. In fact, the company generated nearly 45% of the total volume growth in the overall U.S. beer industry that marked its beer portfolio's twenty-second straight quarter of gains in market share volume.

Taking a look at the fundamentals, the company's consistent focus on brand building and its initiatives to include new products in its wine and spirits business are the major revenue drivers for the stock. Moreover, Constellation Brands has been undertaking meaningful acquisitions and joint ventures, which appear promising and beneficial for its business.

We believe that all these factors have been key drivers for the company and are likely to keep investors in good spirits.

Other Stocks to Consider

Other stocks in the beverage industry that are worth considering include Truett-Hurst Inc. THST and Primo Water Corporation PRMW , both carrying a Zacks Rank #2 (Buy). Another favorably ranked stock in the broader consumer staples sector is Cal-Maine Foods Inc. CALM with a Zacks Rank #1.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days . Click to get this free report >>

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

CONSTELLATN BRD (STZ): Free Stock Analysis Report

CAL-MAINE FOODS (CALM): Free Stock Analysis Report

PRIMO WATER CP (PRMW): Free Stock Analysis Report

TRUETT-HURST (THST): Free Stock Analysis Report

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Zacks Investment Research

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


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

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