Constellation (STZ, $187.09) beats fiscal Q4 earnings estimates, says cheers to beer
Constellation Brands fiscal fourth quarter earnings surpassed analysts’ expectations, largely in part due to the beverage company’s beer sales. The company is also pulling out from its low-end wine brands, apparently to focus on better selling products.
Comparable earnings for the three months ending February came in at $1.84 per share, down -3.15% from the year-ago quarter, but higher than the Street estimate of $1.72 per share.
The company’s sales of $1.797 billion also beat analysts' estimates of $1.73 billion. Sales were also +2% higher compared to the year-ago period.
As it is, consumers are increasingly adopting healthier lifestyles and food habits. People who still consume alcohol are apparently preferring higher-quality wine or premium beer. It is probably this shift in consumer choices that has led Constellation to re-allocate its business more towards beer and other high-end beverages.
On Wednesday, Constellation announced plans to sell off about 30 brands from its wine and spirits portfolio to E. & J. Gallo Winery for $1.7 billion. The company will also be launching its first ever non-beer beverage, named Corona Refresca, during its first quarter.
For the latest reported quarter, Constellation’s beer sales climbed +9.3% year-over-year to $1.09 billion. According to the company, its beer business was the top U.S. market share gainer during the holiday season. It mentioned its brands Modelo Especial, Corona Premier and Corona Familiar as major contributors to its solid beer sales.
Sales from its wine and spirits segment, on the other hand, plunged -7.6% year-over-year to $707.1 million.
For fiscal full-year 2020, Constellation forecasts that its comparable earnings would range between $8.50 and $8.80 per share, excluding Canopy Growth equity earnings (Constellation bought a 38% stake in the marijuana company last year, as a sign of its plans to expand footprints in the cannabis space). The company hopes to have a 7%-9% growth in operating income from its beer division, while anticipating wine and spirits to be hit by -30% to -35% decline in operating incomes.
STZ in downward trend: 10-day moving average crossed below 50-day moving average on December 18, 2024
The 10-day moving average for STZ crossed bearishly below the 50-day moving average on December 18, 2024. 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 .
Technical Analysis (Indicators)
Bearish Trend Analysis
The Momentum Indicator moved below the 0 level on December 13, 2024. You may want to consider selling the stock, shorting the stock, or exploring put options on STZ as a result. In of 93 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 December 16, 2024. 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 December 16, 2024 date and that indicates a change from an upward trend to a downward trend.
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 .
Bullish Trend Analysis
The RSI Oscillator points to a transition from a downward trend to an upward trend -- in cases where STZ's RSI Indicator exited the oversold zone, of 25 resulted in an increase in price. Tickeron's analysis proposes that the odds of a continued upward trend are .
The Stochastic Oscillator shows that the ticker has stayed in the oversold zone for 4 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.
Following a 3-day Advance, the price is estimated to grow further. Considering data from situations where STZ advanced for three days, in of 342 cases, the price rose further within the following month. The odds of a continued upward trend are .
STZ may jump back above the lower band and head toward the middle band. Traders may consider buying the stock or exploring call options.
The Aroon Indicator entered an Uptrend today. In of 267 cases where STZ Aroon's Indicator entered an Uptrend, the price rose further within the following month. The odds of a continued Uptrend are .
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 fair valued 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: P/B Ratio (5.133) is normal, around the industry mean (3.922). P/E Ratio (30.858) is within average values for comparable stocks, (28.956). Projected Growth (PEG Ratio) (2.236) is also within normal values, averaging (2.099). Dividend Yield (0.013) settles around the average of (0.024) among similar stocks. P/S Ratio (5.141) is also within normal values, averaging (6.048).
The Tickeron Profit vs. Risk Rating rating for this company is (best 1 - 100 worst), indicating well-balanced risk and returns. The average Profit vs. Risk Rating rating for the industry is 93, placing this stock slightly better than average.
The Tickeron Seasonality Score of (best 1 - 100 worst) indicates that the company is fair valued in the industry. The Tickeron Seasonality score describes the variance of predictable price changes around the same period every calendar year. These changes can be tied to a specific month, quarter, holiday or vacation period, as well as a meteorological or growing season.
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.
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an alcoholic beverages distributor
Industry BeveragesAlcoholic