Constellation Brands: Deutsche Bank Lowers PT to $158 from $182, Maintains Hold Rating.

Constellation Brands: Deutsche Bank Lowers PT to $158 from $182, Maintains Hold Rating.

Constellation Brands, a leading alcoholic beverage company, has seen a significant downward revision in its price target by Deutsche Bank. The investment bank has reduced its PT (price target) for Constellation Brands (STZ) from $182 to $158, while maintaining a Hold rating. This move comes amidst a challenging macroeconomic environment and declining consumer demand for beer, particularly among Hispanic consumers.

According to recent earnings reports, Constellation Brands has been facing headwinds due to falling demand for high-end beers, with Hispanic consumers being the most affected. The company's CEO, Bill Newlands, has cited economic pressures and volatile consumer purchasing behavior as primary reasons for the decline in sales and profits [1]. The company's fiscal 2026 guidance has been revised to reflect a net sales decline of 2% to 4% and adjusted earnings per share (EPS) of $11.30 to $11.60, down from the previous forecast of $12.60 to $12.90 [2].

The revised guidance also includes a projected 6% to 4% decline in organic net sales, with beer sales expected to fall 4% to 2% due to lower volumes and tariff impacts. Operating income growth has been reduced to 666% to 686%, and comparable operating income is set to decline 11% to 9% [3].

Despite these challenges, Constellation Brands has highlighted growth in beer volume share across 49 U.S. states and a 0.4-point increase in dollar share within the U.S. beer category. The company has also announced cost-saving initiatives and share repurchases to support brand investments.

The stock's sharp decline, reflecting a 6.6% drop on September 2 with a trading volume surge of 220.74%, underscores investor concerns over prolonged macroeconomic pressures and the company's reliance on volatile consumer segments [3]. Constellation Brands will present its outlook at the 2025 Barclays Global Consumer Staples Conference, where financial metrics and strategic priorities will be detailed.

References:
[1] https://www.butlereagle.com/20250902/modelo-seller-constellation-brands-lowers-sales-forecast-as-u-s-consumers-buy-less-beer/
[2] https://finance.yahoo.com/news/constellation-brands-stock-drops-modelo-144916749.html
[3] https://www.ainvest.com/news/constellation-brands-shares-plunge-6-6-220-74-volume-surge-guidance-cuts-signal-struggles-2509/