Is Constellation Brands stock a buy?

Roth Capital Markets analyst Bill Kirk said in a Jan. 7 note that Constellation Brands (Constellation Brands Stock Quote, Chart, News, Analysts, Financials NYSE:STZ) delivered a third-quarter fiscal 2026 beat on sales and earnings and remains positioned for improving fundamentals as the company moves past a difficult comparison period.

Kirk maintained a “Buy” rating and $209.00 12-month price target on the Victor, N.Y.–based beer, wine and spirits producer, which owns brands including Modelo, Corona and Kim Crawford.

Constellation reported consolidated net sales of US$2.22-billion, ahead of consensus expectations of US$2.16-billion, and adjusted earnings per share of US$3.06, compared with Street estimates of US$2.64. Beer net sales totaled US$2.01-billion, in line with expectations. Beer shipments declined 2.2% year over year, continuing a sequential improvement from earlier quarters, while beer depletions fell 3.0% year over year.

Kirk said the narrowing gap between shipments and depletions—about 80 basis points in the quarter versus roughly 600 basis points in the prior quarter—should help ease concerns around wholesaler de-stocking. He added that beer depletion trends appeared to improve through December and are expected to accelerate further in calendar 2026.

With the third-quarter results, Constellation reiterated most elements of its fiscal 2026 guidance, including beer net sales growth of -4% to -2%, consolidated net sales growth of -6% to -4%, adjusted EPS of US$11.30 to US$11.60, and operating cash flow of US$2.5-billion to US$2.6-billion.

Kirk said investor focus is shifting away from the third-quarter print and toward the outlook for the fourth quarter and fiscal 2027, as the company laps negative impacts from California wildfires and enters a period of easier year-over-year comparisons.

“To close out 2025, Constellation Brands’ performance relative to the beer category improved slightly,” Kirk said. “With the World Cup, tax refunds, low fuel costs, a ban on intoxicating hemp, lapping California wildfire impacts, and lapping disruptions to Hispanic consumer habits, Constellation Brands beer depletion should improve and justify re-rating. In the interim, despite tariff headwinds, profitability has been stronger than expected.”

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