Companies and Brands

What to Expect When Constellation Brands Reports Wednesday

Chris Lange

Published: January 8, 2019 1:10 pm

Last Updated: January 31, 2020 2:22 am

Constellation Brands Inc. (NYSE: STZ) is scheduled to release its fiscal third-quarter financial results before the markets open on Wednesday. The consensus estimates are calling for $2.06 in earnings per share (EPS) and $1.91 billion in revenue. The same period of last year reportedly had EPS of $2.00 on $1.8 billion in revenue.

Although this company primarily deals in vices that consumers drink, it wanted to offer the opportunity for consumers to get high as well. In mid-August, Constellation Brands launched a strategic partnership with Canopy Growth Corp. (NYSE: CGC), achieving roughly 38% ownership.

While this seems like a solid move into the “cannabis space,” analysts didn’t think as highly of the deal at the time. However, since then, more and more companies have been investing in weed stocks.

Rob Sands, CEO of Constellation Brands, commented:

Through this investment, we are selecting Canopy Growth as our exclusive global cannabis partner. Over the past year, we’ve come to better understand the cannabis market, the tremendous growth opportunity it presents, and Canopy’s market-leading capabilities in this space. We look forward to supporting Canopy as they extend their recognized global leadership position in the medical and recreational cannabis space.

Overall, Constellation Brands has underperformed the broad markets, with its stock down about 25% in the past 52 weeks. In just the past quarter alone, the stock is down 23%.

A few analysts weighed in on Constellation Brands ahead of the report:

• Susquehanna has a Neutral rating and a $174 price target.
• HSBC has a Buy rating.
• Macquarie has a Hold rating with a $192 price target.
• Morgan Stanley has a Buy rating and a $246 price target.
• OTR has a Positive rating.
• UBS Group has a Neutral rating with a $209 price target.
• Jefferies has a Buy rating with a $289 price target.

Shares of Constellation Brands were last seen up over 1% at $172.83, in a 52-week range of $156.25 to $236.62. The stock has a consensus analyst price target of $238.87.