Constellation Brands (STZ, $223.46) beats Q4 earnings expectations
Beverage company Constellation Brands posted fourth quarter earnings that surpassed analysts’ expectations, on the back of beer sales strength and demand for high-end beverages.
The company’s diluted net earnings for the three months ending in February fell -5.3% from the year-ago quarter to $1.95 per share. Adjusted per-share earnings came in at $1.82, well above FactSet consensus of $1.58.
Revenues increased +3% year-over-year to $1.953 billion, compared to analysts' estimates of $1.9 billion tally. The company’s beer business was bolstered by a strong performance at off-premise channels, which more than offset weakness in on-premise channels with many bars and restaurants operating at limited capacity during the pandemic. Modelo Especial was number 1 import share gainer. Its wine and spirits business, high-end wine brands were driven by double-digit growth for Kim Crawford, Meiomi and The Prisoner Brand family.
Looking ahead, the company is projecting EPS to range from $6.90 to $7.20 and adjusted EPS excluding Canopy to range from $9.95 to $10.25 for fiscal 2022. The current FactSet consensus expectation for EPS is $10.43.
Momentum Indicator for STZ turns positive, indicating new upward trend
STZ saw its Momentum Indicator move above the 0 level on May 17, 2023. This is an indication that the stock could be shifting in to a new upward move. Traders may want to consider buying the stock or buying call options. Tickeron's A.I.dvisor looked at 87 similar instances where the indicator turned positive. In of the 87 cases, the stock moved higher in the following days. The odds of a move higher are at .
Technical Analysis (Indicators)
Bullish Trend Analysis
The Moving Average Convergence Divergence (MACD) for STZ just turned positive on May 17, 2023. Looking at past instances where STZ's MACD turned positive, the stock continued to rise in of 45 cases over the following month. The odds of a continued upward trend are .
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where STZ advanced for three days, in of 325 cases, the price rose further within the following month. The odds of a continued upward trend are .
The Aroon Indicator entered an Uptrend today. In of 242 cases where STZ Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
Bearish Trend Analysis
The Stochastic Oscillator may be shifting from an upward trend to a downward trend. In of 63 cases where STZ's Stochastic Oscillator exited the overbought zone, the price fell further within 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 .
STZ broke above its upper Bollinger Band on May 19, 2023. This could be a sign that the stock is set to drop as the stock moves back below the upper band and toward the middle band. You may want to consider selling the stock or exploring put options.
Fundamental Analysis (Ratings)
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 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 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 80, placing this stock better than average.
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 Valuation Rating of (best 1 - 100 worst) indicates that the company is significantly overvalued 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 (5.071) is slightly higher than the industry average of (2.742). STZ's P/E Ratio (368.262) is considerably higher than the industry average of (37.718). Projected Growth (PEG Ratio) (2.233) is also within normal values, averaging (2.208). Dividend Yield (0.014) settles around the average of (0.023) among similar stocks. P/S Ratio (4.744) is also within normal values, averaging (5.170).
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