Constellation Brands (STZ) Stock Forecast & Price Target

Constellation Brands is positioned for continued revenue growth largely due to its robust market share gains in the U.S. beer category, with operating margins projected to remain strong at the midpoint of 39-40% for fiscal year 2025. The potential for upside is bolstered by the beer category's anticipated reacceleration and the absence of tariffs on Mexican imports, both of which could enhance revenue and earnings, thus supporting multiple expansions. Additionally, the company's strategic focus on portfolio pruning in wine and spirits and innovation-led pricing strategies are expected to drive improved top-line growth and profitability.

Constellation Brands's stock outlook reflects a negative trend due to declining beer volumes, which have recorded a -2.5% performance on a two-year average basis through March, indicating a sequential deceleration from the previous quarter. The company is also facing challenges from category weakness, as the rise of seltzers could further decrease its market share, compounded by an already sluggish beer trend that has underperformed historical averages. Additionally, potential tariffs exceeding 25% and mass deportations could significantly impact revenue and earnings, further contributing to a pessimistic financial forecast for the firm.