One-glance verdict
Undervalued
$175.94 our estimate vs market $128.18
Wall Street consensus: $170.83 (-2.9% lower than our fair-value estimate)
27% below our estimate, below the bear case
Fundamentals snapshot
Constellation Brands, Inc.
STZ · NYQ · Consumer Defensive · Beverages - Brewers
Current price
$128.18
52-week range
$126.45 - $168.60
Market cap
$21.89B
Balance sheet
Stretched
7.92x Adequate
Net debt $10.44B. Interest coverage shows how many times profit covers the interest bill.
What stands out
3 Rewards
0 Risks
3 rewards · 0 risks
- Reward Returns 23.7% on equity, ahead of 80% of its peers.
- Reward Free cash flow was positive in 10/10 years.
- Reward Trades at 12.2x P/E vs peer median 17.8x (31.4% cheaper).
What this company does
Constellation Brands, Inc.
Constellation Brands is a large beverage company that sells beer, wine, and spirits, but makes most of its money selling popular imported beers like Corona and Modelo in the United States. Because its beer business is the main driver of its profits, the company's success largely depends on maintaining the popularity and pricing power (the ability to raise prices without losing many customers) of these key brands.
How the company got here
Constellation Brands started in 1945 as a small New York winery called Canandaigua Industries, founded by Marvin Sands. For many years, it grew by purchasing other wineries and creating popular wine brands. A huge turning point came in 2013 when it bought the U.S. rights to sell popular Mexican beer brands like Corona and Modelo. This deal transformed the company into a major player in the U.S. beer market, which is now its largest business. Over time, it has focused more on 'premium' brands—higher-priced drinks—and has sold off many of its lower-priced wine labels to concentrate on more profitable products.
What it actually does
Constellation Brands makes, imports, and sells a variety of well-known alcoholic beverages that you would find in grocery stores, liquor stores, and restaurants. The company is the largest beer importer in the United States, meaning it brings in more beer from other countries than anyone else. Its main business involves selling popular Mexican beers in the U.S., but it also has a significant portfolio of wines and spirits like whiskey and tequila. Essentially, the company provides a wide range of alcoholic drinks to wholesalers (companies that distribute goods to stores) and retailers (the stores themselves).
Beer
This is by far the company's biggest and most profitable business, making up the vast majority of its sales. Constellation owns the exclusive rights to import, market, and sell a famous lineup of Mexican beers in the United States, including Corona, Modelo Especial, and Pacifico. When you buy one of these beers in the U.S., you are buying from Constellation Brands. This segment's success is a huge driver for the whole company, with Modelo Especial recently becoming the top-selling beer in America.
Wine and Spirits
This part of the company produces and sells a collection of higher-end wines and craft spirits. You might recognize wine brands like Robert Mondavi Winery, Kim Crawford, and The Prisoner Wine Company, or spirits such as High West Whiskey and Casa Noble Tequila. While this segment is much smaller than the beer business, the company's strategy is to focus on 'premiumization' (selling higher-priced, higher-quality products that earn more profit per bottle). This business sells its products to distributors who then supply them to stores and restaurants.
What management is betting on now
Management's main focus is to continue growing its core beer brands, especially Modelo and Corona, which are very popular with consumers. They are investing heavily in expanding their breweries in Mexico to make sure they can produce enough beer to meet high demand. The company is also committed to 'capital allocation' (how it spends its money), which includes investing in its business, paying dividends (a portion of profits paid out to shareholders), and executing buybacks (when a company buys its own stock to reduce the number of shares available, which can increase the value of remaining shares). For the Wine and Spirits business, the strategy is to focus on premium and higher-end brands to improve profitability.
Price history
How the share price has moved
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Earnings history
Last 8 quarters — what happened
Click any quarter to read the call summary and what the numbers say.
FY2025 Q2
$854.00M
FY2025 Q3
$456.80M
FY2025 Q4
$312.10M
FY2026 Q1
$444.40M
FY2026 Q2
$634.80M
FY2026 Q3
$370.90M
FY2026 Q4
$343.90M
FY2027 Q1
$484.60M
Revenue
$2.43B
Net income
$653.80M
Diluted EPS
—
Operating cash flow
$661.80M
Free cash flow
$484.60M
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Sources
Revenue
$1.92B
Net income
$201.80M
Diluted EPS
—
Operating cash flow
$562.80M
Free cash flow
$343.90M
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Sources
Revenue
$2.22B
Net income
$502.80M
Diluted EPS
—
Operating cash flow
$616.90M
Free cash flow
$370.90M
Fetching…
Sources
Revenue
$2.48B
Net income
$466.00M
Diluted EPS
—
Operating cash flow
$852.10M
Free cash flow
$634.80M
Fetching…
Sources
Revenue
$2.52B
Net income
$516.10M
Diluted EPS
—
Operating cash flow
$637.20M
Free cash flow
$444.40M
Fetching…
Sources
Revenue
$2.16B
Net income
$-375.30M
Diluted EPS
—
Operating cash flow
$594.70M
Free cash flow
$312.10M
Fetching…
Sources
Revenue
$2.46B
Net income
$615.90M
Diluted EPS
—
Operating cash flow
$685.20M
Free cash flow
$456.80M
Fetching…
Sources
Revenue
$2.92B
Net income
$-1.20B
Diluted EPS
—
Operating cash flow
$1.18B
Free cash flow
$854.00M
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Sources
Is it cheap or expensive?
Fair value $175.94 vs current price $128.18
Wall Street consensus is the average analyst price target: $170.83 (-2.9% lower than our fair-value estimate).
Our most-likely fair value is $175.94 a share — about 37.3% above today's price of $128.18, so the stock currently looks cheap (undervalued).
Is it drowning in debt?
Stretched
Net debt $10.4B. Interest coverage 7.9x.
Net debt
$10.44B
Interest coverage
7.92x
Constellation Brands, Inc.'s profit covers its interest bill about 7.9 times over. which is stronger than every peer shown here.
Stretched
Worse cushion
Baseline
Better cushion
STZ
BASELINE
Constellation Brands, Inc.
Total debt $10.53B Interest coverage 7.92x This is the baseline the peer rows are being compared against.
Total debt $22.20B Interest coverage 2.94x -63% vs STZ Carries about 2.7x less debt cushion than STZ.
Total debt $72.73B Interest coverage 4.05x -49% vs STZ Carries about 2.0x less debt cushion than STZ.
Total debt $23.99B Interest coverage 5.17x -35% vs STZ Carries about 1.5x less debt cushion than STZ.
Total debt $7.91B Interest coverage 6.58x -17% vs STZ Carries about 1.2x less debt cushion than STZ.
What you should know
The case for and against STZ
3 Rewards
0 Risks
Rewards
-
Returns 23.7% on equity, ahead of 80% of its peers.
-
Free cash flow was positive in 10/10 years.
-
Trades at 12.2x P/E vs peer median 17.8x (31.4% cheaper).
Risks
The numbers
All the key metrics, grouped by purpose
Tap any ? icon to learn what it means.
Valuation
How expensive the stock looks
P/E (TTM)
12.21x
Forward P/E
10.34x
P/B
2.66x
P/S
2.42x
EV/EBITDA
9.44x
PEG ratio
1.63x
Profitability
How much profit each dollar creates
Gross margin
52.7%
Operating margin
35.9%
Net margin
20.1%
ROE
23.7%
ROA
8.6%
Health
Liquidity and balance-sheet strength
Debt / equity
1.23x
Current ratio
0.91x
Quick ratio
0.25x
Total debt
$10.53B
Total cash
$96.60M
Growth
How the business has been compounding
Revenue TTM
$9.06B
Revenue 5Y CAGR
0.9%
EPS TTM
10.50
EPS 5Y CAGR
—
Cash flow
How much cash the business throws off
Operating CF TTM
$2.69B
Free CF TTM
$1.79B
FCF margin
19.8%
Dividend
Shareholder payout
Yield
3.2%
Payout ratio
39.0%
Last ex-div date
2026-07-30