Constellation Brands (STZ, $172.34) Reports -38% Drop in Profit, But Positive Sales Growth
Constellation Brands Inc. reported a substantial decline in profits in the latest quarter, and lowered its earnings outlook for fiscal 2019. Its shares dropped more than -10% Wednesday, following the announcement.
The beverage maker said that net income for its fiscal quarter ending November 30, decreased around -38% to $303.1 million (or $1.56 a share) - from $492.8 million (or $2.45 a share) a year earlier. A spike in freight and marketing costs as well as interest costs related to its investment in Canopy Growth were cited as major factors in squeezing earnings. In November 2017, Constellation Brands made an initial investment of $191.3 million in cannabis company Canopy Growth, and has exercised several options to buy additional shares – thereby adding to transaction and interest costs. Constellation’s operating margin in the period decreased 60 basis points to 37.3%.
The company made a downward revision to its fiscal 2019 profit outlook to a range of $9.20 to $9.30 a share, compared to prior forecast of $9.60 to $9.75 a share.
However, sales were a bright spot. Net sales rose +9.5% to $1.97 billion in the quarter, beating analysts' estimates of $1.91 billion. Its beer sales surged +16% to $1.21 billion.
STZ's RSI Oscillator remains in oversold zone for 8 days
The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an uptrend is expected.
Technical Analysis (Indicators)
Bullish Trend Analysis
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 8 days. The price of this ticker is presumed to bounce back soon, since the longer the ticker stays in the oversold zone, the more promptly an upward trend is expected.
STZ may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on August 18, 2025. You may want to consider selling the stock, shorting the stock, or exploring put options on STZ as a result. In of 89 cases where the Momentum Indicator fell below 0, the stock fell further within the subsequent month. The odds of a continued downward trend are .
The Moving Average Convergence Divergence Histogram (MACD) for STZ turned negative on August 08, 2025. This could be a sign that the stock is set to turn lower in the coming weeks. Traders may want to sell the stock or buy put options. Tickeron's A.I.dvisor looked at 44 similar instances when the indicator turned negative. In of the 44 cases the stock turned lower in the days that followed. This puts the odds of success at .
STZ moved below its 50-day moving average on August 18, 2025 date and that indicates a change from an upward trend to a downward trend.
The 10-day moving average for STZ crossed bearishly below the 50-day moving average on August 25, 2025. This indicates that the trend has shifted lower and could be considered a sell signal. In of 14 past instances when the 10-day crossed below the 50-day, the stock continued to move higher over the following month. The odds of a continued downward trend are .
Following a 3-day decline, the stock is projected to fall further. Considering past instances where STZ declined for three days, the price rose further in of 62 cases within the following month. The odds of a continued downward trend are .
The Aroon Indicator for STZ entered a downward trend on September 12, 2025. This could indicate a strong downward move is ahead for the stock. Traders may want to consider selling the stock or buying put options.
The Tickeron PE Growth Rating for this company is (best 1 - 100 worst), pointing to outstanding earnings growth. The PE Growth rating is based on a comparative analysis of stock PE ratio increase over the last 12 months compared against S&P 500 index constituents.
The Tickeron Valuation Rating of (best 1 - 100 worst) indicates that the company is slightly undervalued in the industry. This rating compares market capitalization estimated by our proprietary formula with the current market capitalization. This rating is based on the following metrics, as compared to industry averages: STZ's P/B Ratio (3.384) is slightly higher than the industry average of (2.029). STZ's P/E Ratio (48.907) is considerably higher than the industry average of (22.669). Projected Growth (PEG Ratio) (1.129) is also within normal values, averaging (2.052). Dividend Yield (0.029) settles around the average of (0.035) among similar stocks. STZ's P/S Ratio (2.499) is slightly higher than the industry average of (1.343).
The Tickeron Price Growth Rating for this company is (best 1 - 100 worst), indicating steady price growth. STZ’s price grows at a higher rate over the last 12 months as compared to S&P 500 index constituents.
The Tickeron SMR rating for this company is (best 1 - 100 worst), indicating weak sales and an unprofitable business model. SMR (Sales, Margin, Return on Equity) rating is based on comparative analysis of weighted Sales, Income Margin and Return on Equity values compared against S&P 500 index constituents. The weighted SMR value is a proprietary formula developed by Tickeron and represents an overall profitability measure for a stock.
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating that the returns do not compensate for the risks. STZ’s unstable profits reported over time resulted in significant Drawdowns within these last five years. A stable profit reduces stock drawdown and volatility. The average Profit vs. Risk Rating rating for the industry is 87, placing this stock worse than average.
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General Information
an alcoholic beverages distributor
Industry FoodMeatFishDairy
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