Stocks sank in early trading, threatening to erase this week’s modest gains for the Dow and the S&P 500, which started today’s session 0.7% and 0.08% higher, respectively. The Nasdaq, at the start of Friday’s session, had logged a 0.6% weekly loss.
Today we’re highlighting a company with a decades-long history as an indispensable household name that’s been quietly diversifying, expanding, and increasing its efficiency. What’s more, the stock is currently trading at a value compared to peers.
The #1 stock for 2023
The #1 Stock for 2023
According to former Goldman Sachs executive, Nomi Prins…
Americans who are hoping for a ‘return to normal’ are going to be shocked when they see what happens next in America.
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Legacy Research:
A Return to Normal? PhD Economist: “Don’t Bet on It”
According to former Goldman Sachs executive, Nomi Prins…
Americans who are hoping for a ‘return to normal’ are going to be shocked when they see what happens next in America.
She says, “If you’re betting your job, savings, or retirement accounts on a return to ‘normal’ you’re about to be left behind by a brand-new crisis few see coming.”
Go here now to see America’s next crisis
Beer, wine, and spirits distributor and manufacturer Constellation Brands (STZ) has more than 100 brands, including Corona, Modelo, Svedka Vodka, Casa Noble Tequila, and Robert Mondavi. Its robust portfolio of high-quality brands also provides investors with exposure to the cannabis industry via its Canopy Growth (CGC) investment.
As the largest beer import company in the US, Constellation has the third highest market share (7.4%) of all major beer suppliers and generates 77% of its consolidated net sales through beer. The company has increased its production capacity four times over the last decade to meet demand and is currently focused on projects in Mexico. With $800 million invested in Mexican Beer Projects in 2022 and renewed support from the Mexican government (via a recent commitment of continued access to government-owned water sources), the expansion is likely to be highly successful.
Investors will be tuned in during the next earnings report, slated for October 5th, looking for results from management’s recent efforts to increase capital expenditure efficiency. The company eliminated class B common stock in an effort to enhance and simplify the capital structure and corporate governance, a decision that’s expected to save $15-20 million in operating costs related to executive compensation and benefits this year.
Investors will be tuned in during the next earnings report, slated for October 5th, looking for results from management’s recent efforts to increase capital expenditure efficiency. The company eliminated class B common stock in an effort to enhance and simplify the capital structure and corporate governance, a decision that’s expected to save $15-20 million in operating costs related to executive compensation and benefits this year.
During its most recent quarterly release, Constellation topped Wall Street’s expectations for both earnings and revenue. The company reported $2.66 per share compared to analyst expectations of $2.51 per share. Revenue was up 16.6% from the same period last year, coming in at $2.36 billion, beating the consensus estimate of $2.16 billion. The company also recently disclosed a quarterly dividend of $0.80, representing a $3.20 annualized dividend and a 1.32%. The yield seems likely to grow with a conservative payout ratio of just 14%.
Equities research analysts predict that Constellation Brands will post $10.91 earnings per share for 2022. Its current price of $242.73 indicates a P/E of 22x STZ seems undervalued compared to competitors like The Duckhorn Portfolio, Inc. with a P/E of 30x and Brown-Forman Corporation with a P/E of 37x. Of 24 analysts offering recommendations for the stock, 19 rate it a Buy, and 5 rate it Hold. There are no Sell ratings. A median price target of $274 represents an 11% upside from the current price.
BMO Capital analyst Andrew Strelzik recently initiated coverage of STZ with an Outperform rating and $290 price target, which implies a 20% upside. The analyst believes Constellation is an “attractive investment with favorable risk/reward as it balances a solid multi-year growth outlook with a valuation discount to peers that is too wide.”
Where to invest $1,000 right now...
Before you consider buying STZ, you'll want to see this.
Investing legend, Keith Kohl just revealed his #1 stock for 2022...
And it's not STZ.
Jeff Bezos, Peter Thiel, and the Rockefellers are betting a colossal nine figures on this tiny company that trades publicly for $5.
Keith say’s he thinks investors will be able to turn a small $50 stake into $150,000.
Find that to be extraordinary?
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But you have to act now, because a catalyst coming in a few weeks is set to take this company mainstream... And by then, it could be too late.
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