Constellation Brands (STZ) Stock Forecast & Price Target

Constellation Brands is positioned for a positive outlook due to its significant market share in the U.S. beer category, with projected operating margins of 39-40% for FY25. The potential for accelerated growth within the beer category, coupled with ongoing market share gains, could drive revenue and earnings upside, enhancing the company's valuation. Furthermore, the lack of tariffs on Mexican beer imports reduces uncertainty and supports margin expansion, while continued focus on portfolio pruning and innovation in wine and spirits is expected to enhance profitability.

Constellation Brands has faced significant challenges with a reported decline in beer volumes by 2.5% on a two-year average basis for the March quarter, indicating a sequential deceleration in performance compared to the previous quarter. The company is operating in a consumer environment marked by sluggish beer trends, which are below historical averages, raising concerns about the potential for further deterioration in category performance, particularly as hard seltzers gain market share. Additionally, possible tariff implementations of 25% or higher could exacerbate revenue declines and impact earnings, further weighing on the company's financial outlook for the year.