On Friday, Deutsche Bank adjusted its price target for Constellation Brands (NYSE:STZ) shares, a leading beverage alcohol company, increasing it slightly to $264 from the previous $262. The firm has decided to maintain its Hold rating on the stock.
The adjustment comes after an assessment of the company's financial outlook, with projections for fiscal year 2025 earnings per share (EPS) being revised upward. This revision is attributed to lower anticipated interest and tax expenses. However, the forecast for fiscal year 2026 EPS has been modestly reduced due to expected continued challenges in the wine and spirits segment.
The new price target of $264 is based on a discounted cash flow (DCF) analysis, which has been updated to account for the passage of time and a favorable mark-to-market (MTM) valuation on Constellation Brands' investment in Canopy Growth (NASDAQ:CGC) Corporation, a cannabis company.
Despite the minor increase in the price target, Deutsche Bank reaffirms its Hold rating on Constellation Brands' stock.
InvestingPro Insights
Constellation Brands (NYSE:STZ) continues to demonstrate financial resilience and growth potential, as evidenced by real-time data from InvestingPro. The company boasts a healthy market capitalization of $49.05 billion, and its P/E ratio stands at 28.21, indicating investor confidence in its earnings capability. Additionally, STZ has achieved a revenue growth of 2.75% over the last twelve months as of Q3 2024, underlining its steady expansion in a competitive market.
InvestingPro Tips highlight that Constellation Brands has raised its dividend for nine consecutive years, showcasing its commitment to returning value to shareholders. Analysts also predict the company will be profitable this year, which aligns with the company's track record of profitability over the last twelve months. On the flip side, investors should take note that five analysts have revised their earnings downwards for the upcoming period, which may warrant caution. However, the company's stock trades with low price volatility, which may appeal to risk-averse investors.
For those looking to delve deeper into Constellation Brands' financial health and future prospects, InvestingPro offers additional insights. Subscribers can access these valuable tips by using the coupon code PRONEWS24 to get an additional 10% off a yearly or biyearly Pro and Pro+ subscription. With a total of 10 InvestingPro Tips available, investors can make more informed decisions backed by comprehensive analysis.
As Deutsche Bank maintains its Hold rating and sets a new price target, these InvestingPro metrics and tips provide a broader context for investors considering their position in Constellation Brands.
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