STZ stock rebound gains momentum after earnings beat – Magic Post

Constellation brands today

STZ

Constellation brands

$141.42 -1.55 (-1.08%)

As of 10/10/2025 at 03:59 PM ET

This is a fair market price provided by Polygon.io. He learns more.

52 week range

$131.20

▼

$247.63

Dividend yield

2.88%

P/E ratio

20.65

Price target

$186.44

Since hitting rock bottom, Warren Buffett’s $2.2 billion bet is Constellation Brands New York Stock Exchange: STZmanaged to achieve a modest recovery. Constellation shares fell below $132 in late September. The last time stocks traded this low was in March 2020, due to the coronavirus market crash. However, shares have since rebounded about 8% to trade just under $143.

Constellation’s Q2 2026 earnings report, released on October 6, helped the company achieve this. The shares rose a combined 3% in the next two trading days. Below, we’ll break down Constellation’s earnings and get an updated perspective on the consumer staples stock. Could stocks see a big rally in the near term, or will investors need to continue to be patient for a significant uptrend to unlock?

STZ Earnings: Mixed, but with signs of strength

With very low expectations, Constellation saw its shares rise despite its mixed results. The Mexican beer maker of Modelo, Corona and Pacifico reported revenue of $2.48 billion, or a 15% decline, about $200 million less than expected. However, the company’s gross profit margin increased by 100 basis points to 52.8%. This significantly exceeded expectations, with analysts expecting the number to fall.

This allowed Constellation to post a big win on adjusted earnings per share (EPS). Its price reached $3.63, or a 16% drop. However, this significantly beat expectations of $3.37, or a 22% decline. It is worth noting that the company maintained its guidance for the full year, which it had previously lowered. This was a good indicator, showing that the company’s outlook did not deteriorate significantly over the past month. Overall, Constellation’s report was somewhat encouraging given the challenging environment the company is in.

Updated price targets run counter to consensus, suggesting a longer road to recovery

Currently, MarketBeat’s consensus target price on Constellation is around $189. This number indicates the possibility of stocks rising by 31%. However, following Constellation’s earnings report, MarketBeat tracked down several Wall Street analysts who updated their forecasts.

Among them, the average target was around $163. This suggests that shares could rise by about 14%. Although significant, this potential rise is much more conservative than consensus expectations. Thus, although the constellation is recovering from its depths, greater recovery may take longer than previously thought.

STZ tailwinds and headwinds: demographic shifts versus GLP-1s

One major tailwind for Constellation is the expectation that Hispanic Americans will continue to become a larger portion of the U.S. population. Hispanic Americans account for about 50% of Constellation’s beer sales. This group also drives the bulk of population growth in the United States. Analysts expect this to continue, regardless of migration trends, providing the company with a key driver of structural growth.

Additionally, immigration from Hispanic countries to the United States will only help Constellation. In theory, population movements between the two could simply mean that Constellation’s revenue location will change, but it won’t change much overall. However, in reality, Constellation generates no revenue in Mexico. Due to licensing agreements, Constellation can only sell Mexican beer in the United States. Meanwhile, Anheuser-Busch InBev SA/NV Sneezing: bud It has the right to sell these products in Mexico and most other countries.

Many investors have pointed to increased GLP-1 utilization as a major headwind for Constellation. The concern is that these drugs reduce cravings in patients. Thus, alcohol consumption will come under pressure with higher GLP-1 use. However, there is currently no strong scientific evidence to support this idea.

In 2024, The Lancet A systematic review has been issued Of six studies to evaluate the claim. It concluded that “there is little high-quality evidence” showing the effect of GLP-1s on alcohol use. Likewise, 2025 A systematic review of eight studies found that GLP-1s were not associated with an overall reduction in alcohol intake. Clearly, these reviews offer significant opposition to the idea that the GLP-1s represent a meaningful headwind for Constellation at this point.

The constellation’s long-term potential remains strong

Overall, it’s no secret that Constellation’s business is a mess. However, with the stock still barely trading above a five-year low, downside potential looks very limited. Longer term, shares have strong potential for recovery due to Constellation’s strong beer brands and favorable demographic trends. This results in an appropriate risk-reward profile for the stock. Importantly, shares are still roughly 85% below their all-time high of $264, highlighting the significant upside potential available to long-term investors.

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