What Happened?
Shares of beer, wine, and spirits company Constellation Brands (NYSE: STZ) fell 3.3% in the afternoon session after RBC Capital trimmed its price target on the stock to $230 from $233, though it maintained an Outperform rating.
The price target reduction adds to a period of negative sentiment for the beverage company. Earlier in the month, Constellation announced the sale of its Copper & Kings American Brandy Company, and the stock has declined since that announcement. Broader market concerns may also be weighing on investor confidence, including the potential impact of anti-obesity medications on alcohol consumption and the threat of tariffs on its wine business, as the company is a major importer.
The shares closed the day at $163.63, down 2.4% from previous close.
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What Is The Market Telling Us
Constellation Brands’s shares are not very volatile and have only had 2 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The biggest move we wrote about over the last year was 8 months ago when the stock dropped 16.7% on the news that the company reported weak fourth quarter results, which fell below Wall Street's expectations for most of the key metrics we track, including sales, operating profits, and earnings. In addition, management lowered full-year earnings guidance, which is worrisome. Overall, this was a challenging quarter for the company.
Constellation Brands is down 26.5% since the beginning of the year, and at $163.68 per share, it is trading 36.7% below its 52-week high of $258.40 from September 2024. Investors who bought $1,000 worth of Constellation Brands’s shares 5 years ago would now be looking at an investment worth $908.42.
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