Constellation Brands Hits 52-Week High - Analyst Blog
March 11 2014 - 10:00AM
Zacks
Shares of Constellation
Brands Inc. (STZ) reached a new 52-week high of $84.33
yesterday and closed the trading session at $83.95. Apart from
strong third-quarter fiscal 2014 results and an upbeat guidance,
the company has been performing well on the back of brand building
and inorganic growth strategies. Notably, the stock price of this
beverage company rose approximately 21.2% year-to-date.
The average volume of shares traded
over the last 3 months was approximately 1,513K. Moreover, the
company currently trades at a forward P/E of 21.1x, slightly higher
than the peer group average of 21.06x. Further, the company’s
long-term estimated earnings per share (EPS) growth rate of 16.5%
is substantially higher than the peer group average of 7.8%.
Investors are optimistic about this
Zacks Rank #3 (Hold) stock after it posted EPS of $1.10 on Jan 8,
which handily surpassed the Zacks Consensus Estimate of 91 cents
and rose 74.6% year over year. Constellation Brands reported net
sales of $1,443.3 million, marking a rise of 88.2% from the
prior-year quarter and handily beating the Zacks Consensus Estimate
of $1,386 million.
The year-over-year top-line growth
was primarily attributable to complete consolidation of the Crown
Import business. Moreover, Constellation Brand’s history of
positive earnings surprises makes investors bullish about the
stock. We observe that the company has beaten the Zacks Consensus
Estimate in the past 3 out of 4 quarters by an average of 6.5%.
Constellation Brands’ sustained
focus on brand building and introduction of new products in the
wine and spirits business are the major factors behind the stock’s
momentum. Additionally, last year, the company acquired the Grupo
Modelo SAB de C.V.’s U.S. beer business, which included full
ownership of Crown Imports from Anheuser-Busch InBev
SA/NV (BUD). Moreover, Constellation Brands is enhancing
its distribution channels in retail and effectively implementing
strategic merchandising initiatives to augment sales.
Considering the positive impact
from the full consolidation of Grupo Modelo and strong
third-quarter results, management raised its guidance for fiscal
2014. Constellation Brands expects fiscal 2014 adjusted earnings to
be in the range of $3.10–$3.20 per share, compared with $2.80–$3.10
projected earlier. Currently, the Zacks Consensus Estimate stands
at $3.19, which lies near the higher end of the guidance range.
Apart from Constellation Brands,
other stocks like McGraw Hill Financial, Inc.
(MHFI) and Skechers USA Inc. (SKX) achieved new
52-week highs of $82.29 and $36.47 respectively, on Mar 10,
2014.
ANHEUSER-BU ADR (BUD): Free Stock Analysis Report
MCGRAW HILL FIN (MHFI): Free Stock Analysis Report
SKECHERS USA-A (SKX): Free Stock Analysis Report
CONSTELLATN BRD (STZ): Free Stock Analysis Report
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