Constellation Brands, Inc. Class A’s (STZ) “Buy” Rating Reiterated at Pivotal Research

Pivotal Research reissued their buy rating on shares of Constellation Brands, Inc. Class A (NYSE:STZ) in a report issued on Wednesday. Pivotal Research currently has a $265.00 target price on the stock.

“We estimate interest expense will rise about $40 million per quarter and the company will not be buying back shares or doing other acquisitions until the debt returns to 3.5x EBITDA. We estimate pro forma Debt/ 2019 EBITDA to be 4.7x after this deal. Thus, in the short-term, this is quite a big negative. Our FY19 EPS estimate goes to $9.08, down from $9.60 (guidance $9.40 – $9.70). For FY20 our estimate goes to $9.65, down from $10.85. The estimate cut is driven by 1) higher interest expense; 2) higher share count since we had assumed share repurchase in the model; and 3) the lack of any meaningful benefit flowing through at the equity line as a current return on the investment.”,” Pivotal Research’s analyst commented.

STZ has been the topic of a number of other research reports. ValuEngine lowered shares of Constellation Brands, Inc. Class A from a buy rating to a hold rating in a research note on Friday, May 18th. Stifel Nicolaus lifted their price objective on shares of Constellation Brands, Inc. Class A from $228.00 to $230.00 and gave the company a hold rating in a research note on Thursday, May 31st. OTR Global lowered shares of Constellation Brands, Inc. Class A to a positive rating in a research note on Friday, June 15th. Morgan Stanley dropped their price objective on shares of Constellation Brands, Inc. Class A from $262.00 to $258.00 and set a buy rating on the stock in a research note on Tuesday, July 3rd. Finally, Deutsche Bank dropped their price objective on shares of Constellation Brands, Inc. Class A to $234.00 and set a buy rating on the stock in a research note on Thursday, July 5th. Five equities research analysts have rated the stock with a hold rating, eighteen have assigned a buy rating and two have assigned a strong buy rating to the company’s stock. Constellation Brands, Inc. Class A has an average rating of Buy and a consensus target price of $246.34.

NYSE STZ opened at $203.93 on Wednesday. Constellation Brands, Inc. Class A has a one year low of $195.89 and a one year high of $236.62. The company has a debt-to-equity ratio of 0.89, a quick ratio of 0.77 and a current ratio of 1.81. The company has a market capitalization of $40.78 billion, a P/E ratio of 23.02, a price-to-earnings-growth ratio of 1.93 and a beta of 0.03.

Constellation Brands, Inc. Class A (NYSE:STZ) last posted its quarterly earnings results on Friday, June 29th. The company reported $2.20 EPS for the quarter, missing the Thomson Reuters’ consensus estimate of $2.42 by ($0.22). Constellation Brands, Inc. Class A had a net margin of 31.51% and a return on equity of 19.81%. The business had revenue of $2.05 billion during the quarter, compared to analysts’ expectations of $2.05 billion. During the same quarter in the previous year, the business posted $2.34 EPS. The company’s quarterly revenue was up 6.1% on a year-over-year basis. equities research analysts predict that Constellation Brands, Inc. Class A will post 9.57 EPS for the current year.

The business also recently declared a quarterly dividend, which will be paid on Friday, August 24th. Stockholders of record on Friday, August 10th will be given a dividend of $0.74 per share. This represents a $2.96 dividend on an annualized basis and a dividend yield of 1.45%. The ex-dividend date is Thursday, August 9th. Constellation Brands, Inc. Class A’s payout ratio is currently 10.67%.

Several hedge funds have recently added to or reduced their stakes in STZ. Jennison Associates LLC grew its position in shares of Constellation Brands, Inc. Class A by 344.8% during the second quarter. Jennison Associates LLC now owns 2,101,846 shares of the company’s stock worth $460,031,000 after buying an additional 1,629,361 shares in the last quarter. Standard Life Aberdeen plc grew its position in shares of Constellation Brands, Inc. Class A by 229.3% during the second quarter. Standard Life Aberdeen plc now owns 748,508 shares of the company’s stock worth $164,208,000 after buying an additional 521,174 shares in the last quarter. BlackRock Inc. grew its position in shares of Constellation Brands, Inc. Class A by 3.0% during the second quarter. BlackRock Inc. now owns 11,987,700 shares of the company’s stock worth $2,623,747,000 after buying an additional 345,735 shares in the last quarter. FMR LLC grew its position in shares of Constellation Brands, Inc. Class A by 6.0% during the second quarter. FMR LLC now owns 5,969,243 shares of the company’s stock worth $1,306,489,000 after buying an additional 337,338 shares in the last quarter. Finally, Bank of America Corp DE grew its position in shares of Constellation Brands, Inc. Class A by 17.3% during the second quarter. Bank of America Corp DE now owns 2,001,752 shares of the company’s stock worth $438,124,000 after buying an additional 295,598 shares in the last quarter. 73.66% of the stock is owned by institutional investors and hedge funds.

About Constellation Brands, Inc. Class A

Constellation Brands, Inc, together with its subsidiaries, produces, imports, and markets beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. The company sells wine across various categories, including table wine, sparkling wine, and dessert wine. It provides beer primarily under the Corona Extra, Corona Light, Modelo Especial, Modelo Negra, Modelo Chelada, Pacifico, and Victoria brands, as well as Funky Buddha, Obregon Brewery, and Ballast Point brands.

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Analyst Recommendations for Constellation Brands, Inc. Class A (NYSE:STZ)

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