Constellation Brands' Premiumization Plan Sets the Stage for Growth

Constellation Brands, Inc. STZ maintains a solid foothold in the beer, wine and spirits market, driven by its focus on premiumization, a strong lineup of brands and prudent portfolio management. Its portfolio comprises a broad array of consumer-centric, premium labels, such as Modelo Especial, Corona Extra, Pacifico, Robert Mondavi Winery, Kim Crawford, The Prisoner Wine Company and High West. Leveraging the strength of these brands, the company remains well-positioned to meet evolving consumer tastes and benefit from growth opportunities in the global beverage industry.

Constellation Brands is focused on building a portfolio centered on high-margin, fast-growing segments within the beverage alcohol industry, supported by its direct-to-consumer capabilities and expanding global footprint. Its flagship beer brands — Modelo, Corona and Pacifico — remain key growth engines, strengthening the company’s position in the U.S. beer market. Constellation Brands continues to invest in its Power Brands through product innovation and by capitalizing on evolving consumer preferences with successful new offerings.

The company remains well-positioned for long-term growth as it focuses on premium, high-margin categories, with an emphasis on expanding market presence and enhancing profitability. Constellation Brands is refining its wine and spirits portfolio to emphasize higher-end brands with stronger growth and margin potential. The company is also expanding its direct-to-consumer and international reach while pursuing productivity, cost-saving and digital initiatives to improve operational efficiency.

At its core, Constellation Brands is well-positioned to capitalize on the ongoing shift toward premium beverages, backed by a strong portfolio of category-leading brands and a clear focus on growth. A strong beer portfolio, ongoing brand investments, premiumization strategy, innovations and cost-saving initiatives provide important support for STZ’s continued growth and long-term value creation.

STZ’s Price Performance, Valuation & Estimates

Shares of Constellation Brands have lost 15% in the past six months compared with the industry’s decline of 4.3%.

Image Source: Zacks Investment Research

From a valuation standpoint, STZ trades at a forward price-to-earnings ratio of 11.09X compared with the industry’s average of 14.97X.

Image Source: Zacks Investment Research

The Zacks Consensus Estimate for STZ’s fiscal 2027 and fiscal 2028 earnings per share (EPS) indicates year-over-year growth of 0.2% and 3.7%, respectively. The company’s EPS estimate for fiscal 2027 and fiscal 2028 has moved north in the past 30 days.

Image Source: Zacks Investment Research

Constellation Brands stock currently carries a Zacks Rank #3 (Hold).

Key Consumer Staple Picks

The Chefs' Warehouse, Inc. CHEF, which is a distributor of specialty food products in the United States, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here. 

The Zacks Consensus Estimate for Chefs' Warehouse's current financial-year sales indicates growth of 10.6% from the prior-year level. CHEF delivered a trailing four-quarter earnings surprise of 30.4%, on average.

Darling Ingredients Inc. DAR, which produces sustainable natural ingredients derived from edible and inedible bio-nutrients, currently sports a Zacks Rank of 1.

The consensus estimate for Darling Ingredients’ current financial-year sales is expected to rise 12.8% from the year-ago reported figure. DAR delivered a trailing four-quarter earnings surprise of 38.9%, on average.

Utz Brands, Inc. UTZ, which is a leading manufacturer of a diverse portfolio of salty snacks, currently carries a Zacks Rank #2 (Buy). UTZ delivered a trailing four-quarter earnings surprise of 1.8%, on average.

The Zacks Consensus Estimate for UTZ’s current financial-year sales indicates a jump of 3.7% from the year-ago number. 

7 Best Stocks for the Next 30 Days

Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."

Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention. 

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

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research