STZ
Constellation Brands, Inc.$146.44
Sell
Target $116.50
Report: Mar 13, 2026Consumer Defensive • Beverages - Wineries & Distilleries • Mature CompounderSnapshot
Decision-first overview with recommendation, valuation anchor, and current setup.
Company Overview
Research Snapshot
Price History
Pelican View
Current$146.44-20.4%
Rec: SellConviction: High
Entry Target
N/A
N/A
Fair Value
$116.50
(20% below current)
Stop Loss
N/A
N/A
Position Size
None
Time Horizon
N/A
Key Metrics
Live Snapshot
Market Data
52 Week High$196.91
52 Week Low$126.45
Avg. 3 Month Volume2.37M
Efficiency
LTM Gross Margin52.0%
LTM EBITDA Margin27.0%
LTM EBIT Margin21.3%
LTM Operating Margin19.9%
LTM ROA5.1%
LTM ROE15.1%
LTM ROIC9.1%
LTM ROCE10.7%
Capital Structure
Market Cap (MM)$26.0B
Enterprise Value (MM)$36.5B
Shares Outstanding174.51M
Total Debt (MM)$10.66B
Cash & Equivalents (MM)$152.40M
LTM Net Debt (MM)$10.51B
LTM Net Debt/EBITDA4.1x
Growth
TTM Rev. Growth-7.9%
Last 3-Yr Rev. CAGR-0.6%
Last 3-Yr EBITDA CAGR21.8%
Last 3-Yr EPS CAGR140.1%
Valuation
Street Target Price$166.33
LTM EV/Revenue3.9x
LTM EV/Gross Profit7.5x
LTM EV/EBIT18.2x
LTM EV/EBITDA14.4x
LTM P/E23.4x
LTM EV/FCF20.2x
LTM P/FCF14.4x
LTM P/TB1.9x
LTM P/B3.4x
Dividend Yield2.7%
Payout Ratio63.9%
Executive SummarySituation: Current price is $146.44 versus fair value $116.5 (-20.4% expected return), and valuation confidence is stable. Debate: Bull case depends on CEO Succession (April 2026): Nicholas Fink takes over as CEO. Bear case centers on Moat Erosion: Permanent loss of pricing power and market share in the premium beer segment due to shifting consumer preferences or competitive entry. Conclusion: Recommendation is Sell with no position, pending a materially better risk/reward setup.
Bull Case
The bull case rests on the 17% projected IRR for the Mexican brewery expansions and the potential for free cash flow to surge to $1.5B by 2027 as CapEx tapers. Proponents argue that the stock is a value play at 12x forward earnings, with the Veracruz brewery providing a long-term tailwind for East Coast distribution.
Bear Case
The bear case highlights a double-digit earnings decline driven by a 200 basis point margin hit from aluminum tariffs and a negative incremental ROIC of -28.6%. Critics point to the negative tangible book value of -$12.5M and rising leverage, with net debt-to-EBITDA reaching 4.1x, as evidence of a fragile financial foundation.
Key Catalysts
Near-Term (0-6 months)Impact: High
CEO Succession (April 2026): Nicholas Fink takes over as CEO. This event will likely force a 'kitchen sink' quarter where the new leadership...
Near-Term (0-6 months)Impact: Critical
FY2027 Margin Guidance Update: Management has deferred specific FY2027 margin guidance until April 2026. A failure to return to the 39-40% t...
Long-Term (18+ months)Impact: Moderate
The company is at a critical juncture with a CEO transition occurring just as operating margins have hit a multi-year low of 0.9%, making th...
Primary Risks
Concern: High
Moat Erosion: Permanent loss of pricing power and market share in the premium beer segment due to shifting consumer preferences or competiti...
Concern: Medium
Tariff Escalation: Further increases in aluminum or Mexican import tariffs that cannot be fully passed through to consumers.
Concern: Medium
The governance outcome tree suggests three paths: 1. Status Quo: Nicholas Fink continues the current high-CapEx strategy, likely leading to...
Recent Activity
2026-02-13SEC Filing (8-K)
-8.04%Constellation Brands announces CEO succession plan with Nicholas Fink to succeed Bill Newlands effective April 13, 2026
2026-01-08SEC Filing (8-K)
+5.32%Constellation Brands reports Q3 FY2026 results with EPS of $2.88 reported and $3.06 comparable
2025-04-09Market Movement
+7.28%Market/Sector Move +7.28%
2023-07-19SEC Filing (8-K)
+5.35%Unavailable
2023-01-05SEC Filing (8-K)
-9.72%Constellation Brands reports Q3 FY2023 results with Beer Business driving strong performance
Valuation Table
9.8/10Decision Grade
Scenario Range
$55
Bear
$120
Base
$175
Bull
$146