Constellation Brands Stock Fair Value – Constellation Brands: Wait for the Pullback Before Investing
December 20, 2023
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If you’re considering investing in Constellation Brands ($NYSE:STZ), I highly recommend waiting for a pullback in the stock price before investing. Constellation Brands is one of the world’s leading multi-category beverage alcohol companies, offering a wide range of wine, beer, and spirits products across multiple geographies. The company’s portfolio includes some of the most popular brands in the industry such as Corona Extra, Modelo Especial, Robert Mondavi, SVEDKA Vodka, and Black Velvet Canadian Whisky. Constellation Brands also offers craft beers, spirits, ciders, and coolers. Constellation Brands has seen impressive growth over the past few years and currently trades at a relatively high valuation.
As such, I believe the stock is currently overpriced and will benefit from a price decrease before any investor should consider jumping in. While the company has been successful in capitalizing on strong trends in the beverage alcohol industry, investors should look for opportunities to buy at more reasonable prices. Waiting for a pullback can help investors take advantage of these opportunities.
Stock Price
Constellation Brands has had a strong first day of trading on Tuesday, opening at $239.4 and closing at $241.1, up by 0.9% from the previous closing price of 238.9. This price surge was likely driven by the company’s strong fundamentals and positive expectations for the future. Given the recent surge in CONSTELLATION BRANDS stock price, it is possible that the market has overvalued the stock; investing at current prices may not be sound strategy. As such, investors should wait for the stock to pullback and then decide if it is an attractive investment opportunity.
Investing when the stock is oversold may result in better returns compared to investing at current prices. In conclusion, while CONSTELLATION BRANDS has had a strong first day of trading, investors should wait for the stock to pullback before investing in order to avoid overpaying for the stock. This will ensure that investors get a good return on their investment and maximize their profits. Live Quote…
About the Company
Income Snapshot
Below shows the total revenue, net income and net margin for Constellation Brands. More…
| Total Revenues | Net Income | Net Margin |
| 9.79k | 1.52k | 17.3% |
Cash Flow Snapshot
Below shows the cash from operations, investing and financing for Constellation Brands. More…
| Operations | Investing | Financing |
| 2.72k | -1.11k | -1.69k |
Balance Sheet Snapshot
Below shows the total assets, liabilities and book value per share for Constellation Brands. More…
| Total Assets | Total Liabilities | Book Value Per Share |
| 24.93k | 15.21k | 51.13 |
Key Ratios Snapshot
Some of the financial key ratios for Constellation Brands are shown below. More…
| 3Y Rev Growth | 3Y Operating Profit Growth | Operating Margin |
| 6.4% | 4.2% | 24.4% |
| FCF Margin | ROE | ROA |
| 15.8% | 16.6% | 6.0% |
Analysis – Constellation Brands Stock Fair Value
At GoodWhale, we have conducted a financial analysis of CONSTELLATION BRANDS and found that its fair value is approximately $253.2 per share. This figure was determined using GoodWhale’s proprietary Valuation Line, which takes into account factors such as past performance, macro-economic environment, and industry dynamics. Currently, the share is being traded at $241.1, which is fairly priced but undervalued by 4.8%. We believe that there is an opportunity for investors to take advantage of this potential upside. Our analysis also suggests that CONSTELLATION BRANDS is well positioned to deliver strong returns in the long run. More…
Peers
Constellation Brands Inc is one of the world’s leading producers and marketers of beer, wine, and spirits. The company has a portfolio of well-known brands that include Corona, Modelo, and Pacifico beers; Robert Mondavi, Kim Crawford, and Meiomi wines; and Svedka vodka. Constellation Brands competes with Heineken NV, Shanxi Xinghuacun Fen Wine Factory Co Ltd, and Vintage Wine Estates Inc in the global beer, wine, and spirits market.
– Heineken NV ($OTCPK:HEINY)
Heineken NV is a Dutch brewing company, founded in 1864 by Gerard Adriaan Heineken in Amsterdam. As of 2022, Heineken NV had a market capitalization of 49.75 billion euros and a return on equity of 17.82%. The company brews and sells a variety of beer brands, including Heineken, Amstel, and Desperados. Heineken NV also has a diverse portfolio of non-alcoholic beverages, including sodas, juices, and waters. In addition to brewing and selling beverages, Heineken NV also owns a number of breweries and distributes a variety of beer brands.
– Shanxi Xinghuacun Fen Wine Factory Co Ltd ($SHSE:600809)
Shanxi Xinghuacun Fen Wine Factory Co Ltd is a Chinese company that specializes in the production of alcohol. The company has a market capitalization of 320.39 billion as of 2022 and a return on equity of 30.61%. The company’s products include wines, spirits, and other alcoholic beverages.
– Vintage Wine Estates Inc ($NASDAQ:VWE)
Vintage Wine Estates is a publicly traded wine company with a portfolio that includes 17 wine brands. The company’s brands are distributed in all 50 states and in more than 60 countries. Vintage Wine Estates is headquartered in Santa Rosa, California.
The company’s market cap is $180.14 million, and its ROE is 2.43%. Vintage Wine Estates is a leading wine company with a diversified portfolio of high-quality brands. The company’s wines are distributed in all 50 states and in more than 60 countries. Vintage Wine Estates is committed to producing superior wines that reflect the unique character of each vineyard and region.
Summary
Constellation Brands is a multinational producer and marketer of beer, wine and spirits. It is an attractive stock for investors as its products have a large consumer base, and its brands are popular in the US and abroad. Despite its strong fundamentals, the stock is currently trading at a premium that can be considered too expensive. Therefore, investors should consider waiting for a pullback in order to buy at a lower price.
Fundamental analysis shows that the company has strong cash flow, low debt and a healthy balance sheet. Furthermore, its acquisition of additional craft beer brands has allowed the company to expand into new markets. Overall, Constellation Brands is an attractive stock for investors looking for long-term growth, but it may be wise to wait for a pullback before entering the stock at the current price.
