Constellation Brands (STZ), best known for marquee beer brands like Corona and Modelo, recently issued a sobering fiscal 2026 earnings forecast that sent shares tumbling to their lowest levels since the height of the Covid-19 pandemic. This was a result of a tough economic backdrop that is weighing on alcohol demand.
CEO Bill Newlands noted that high-end beer sales have slowed in recent months, with fewer shopping trips and lower spending per visit. The company earlier this year had projected that higher U.S. tariffs on beer would impact sales and overall consumer demand.
More News from Barchart
So, now let's analyze whether this pullback represents a value opportunity with long-term potential or signals deeper headwinds ahead.
About STZ Stock
Constellation Brands is a Fortune 500 American producer and marketer of beer, wine, and spirits, operating in the U.S., with operations spanning the U.S., Mexico, New Zealand, and Italy. The company is headquartered in Rochester, New York, with its market cap standing at $26.7 billion.
Constellation Brands has experienced a sharp decline in recent trading sessions amid a downturn in its operating outlook. On Sept. 2, the stock tumbled 6.6% intraday and then another 3% today to hit a 52-week low of $146.6 during the session, driven by disappointing consumer demand, especially within its core Hispanic demographic, heightened tariff-related cost pressures, and a cautious fiscal 2026 guidance cut.
The company's stock has already plunged 33.5% on a year-to-date (YTD) basis and 40.5% over the past 52 weeks.
The stock is trading at a discounted valuation compared to industry peers and the historical average at 12.86 times forward non-GAAP earnings.
Constellation Brands Is Demonstrating Weak Quarterly Performance
Constellation Brands reported its Q1 Fiscal 2026 results on July 1 for the quarter ending May 31, 2025. The company faced notable pressure across its segments, and net sales dropped 6% year-over-year (YoY) to $2.5 billion, with a comparable organic net sales decline of around 4%. Comparable operating income declined 11% YoY, while net income slipped 41% to $516 million. On a comparable basis, EPS was $3.22, down 10% from the prior year quarter.