Constellation Brands (NYSE:STZ) Sees Unusually-High Trading Volume After Earnings Beat

Key Points

• Constellation Brands beat quarterly expectations: Adjusted EPS came in at $3.74 versus the $3.55 consensus, while revenue rose 6.1% year over year to $2.63 billion. Beer sales grew 5%, and wine and spirits sales increased 17%.
• The company expanded its ready-to-drink portfolio by acquiring SpikedAde for $75 million upfront, with potential contingent payments of up to $278 million.
• Constellation declared a $1.03 quarterly dividend, equal to $4.12 annually and an indicated yield of about 3.5%. Despite the earnings beat, analyst sentiment remains mixed, with a consensus “Hold” rating and a $157.40 target price.

Constellation Brands Inc (NYSE:STZ - Get Free Report) saw unusually-high trading volume on Wednesday following a stronger than expected earnings report. 1,685,342 shares were traded during mid-day trading, a decline of 25% from the previous session's volume of 2,238,144 shares. The stock last traded at $115.6440 and had previously closed at $115.67.

The company reported $3.74 earnings per share for the quarter, topping analysts' consensus estimates of $3.55 by $0.19. Constellation Brands had a return on equity of 25.58% and a net margin of 18.87%.The firm had revenue of $2.63 billion for the quarter, compared to analyst estimates of $2.54 billion. During the same period last year, the company earned $3.63 EPS. The business's quarterly revenue was up 6.1% compared to the same quarter last year. Constellation Brands has set its FY 2027 guidance at 11.200-11.900 EPS.

Constellation Brands Announces Dividend

The business also recently declared a quarterly dividend, which will be paid on Friday, November 13th. Investors of record on Friday, October 30th will be issued a $1.03 dividend. The ex-dividend date is Friday, October 30th. This represents a $4.12 annualized dividend and a yield of 3.5%. Constellation Brands's payout ratio is 39.31%.

Trending Headlines about Constellation Brands

Here are the key news stories impacting Constellation Brands this week:

• Positive Sentiment: Constellation Brands reported fiscal second-quarter adjusted EPS of $3.74, above the $3.55 analyst consensus, while revenue rose 6.1% year over year to $2.63 billion, exceeding expectations of $2.54 billion. Beer sales increased 5%, and wine and spirits sales rose 17%. Reuters earnings report
• Positive Sentiment: The company acquired SpikedAde for $75 million at closing, with potential contingent payments of up to $278 million, expanding its presence in the growing spirit-based ready-to-drink beverage category. SpikedAde acquisition announcement
• Positive Sentiment: STZ declared a quarterly dividend of $1.03 per share, or $4.12 annually, representing an indicated yield of roughly 3.5%. Wells Fargo also maintained an overweight rating despite cutting its price target to $140 from $170. Wells Fargo price target update

Analyst Ratings Changes

STZ has been the subject of several research reports. Deutsche Bank Aktiengesellschaft decreased their price objective on shares of Constellation Brands from $150.00 to $136.00 and set a "hold" rating for the company in a report on Friday, September 11th. Weiss Ratings reissued a "hold (c-)" rating on shares of Constellation Brands in a research note on Friday, July 31st. Morgan Stanley lowered their price objective on shares of Constellation Brands from $183.00 to $158.00 and set an "equal weight" rating for the company in a report on Thursday, July 2nd. Barclays cut their price objective on Constellation Brands from $132.00 to $122.00 and set an "equal weight" rating on the stock in a research report on Tuesday, September 22nd. Finally, Roth Capital reissued a "buy" rating and issued a $209.00 target price on shares of Constellation Brands in a research report on Thursday, July 2nd. Ten investment analysts have rated the stock with a Buy rating, nine have given a Hold rating and three have given a Sell rating to the stock. Based on data from MarketBeat.com, Constellation Brands presently has a consensus rating of "Hold" and a consensus target price of $157.40.

Hedge Funds Weigh In On Constellation Brands

Hedge funds have recently added to or reduced their stakes in the company. Ally Financial Inc. purchased a new position in shares of Constellation Brands in the 2nd quarter worth $1,600,000. Diamond Hill Capital Management LLC Investment Advisor bought a new position in Constellation Brands in the second quarter valued at about $31,582,000. Ables Iannone Moore & Associates Inc. boosted its position in Constellation Brands by 105.2% in the third quarter. Ables Iannone Moore & Associates Inc. now owns 16,904 shares of the company's stock worth $1,911,000 after purchasing an additional 8,667 shares during the last quarter. Concurrent Investment Advisors LLC boosted its position in Constellation Brands by 1,613.6% in the second quarter. Concurrent Investment Advisors LLC now owns 27,915 shares of the company's stock worth $3,883,000 after purchasing an additional 26,286 shares during the last quarter. Finally, CORDA Investment Management LLC. grew its stake in shares of Constellation Brands by 12.6% during the 1st quarter. CORDA Investment Management LLC. now owns 140,050 shares of the company's stock valued at $21,008,000 after purchasing an additional 15,694 shares during the period. 77.34% of the stock is currently owned by hedge funds and other institutional investors.

Constellation Brands Stock Up 0.5%

The stock has a market cap of $19.84 billion, a PE ratio of 11.04, a price-to-earnings-growth ratio of 2.25 and a beta of 1.75. The company has a debt-to-equity ratio of 1.06, a quick ratio of 0.48 and a current ratio of 0.91. The company's 50-day moving average price is $126.30 and its 200 day moving average price is $138.65.

About Constellation Brands

Constellation Brands, Inc is a beverage alcohol company that develops, markets and distributes beer, wine and spirits. Its portfolio includes well-known beer brands such as Modelo Especial, Corona Extra, Corona Light and Pacifico, along with wine brands including Robert Mondavi, Kim Crawford, Meiomi, The Prisoner Wine Company and Ruffino.

The company also offers spirits through brands such as Casa Noble tequila and High West whiskey. Constellation's products are sold through retailers, distributors, restaurants and other on-premise locations, with a primary focus on the United States.

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