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Corona Brands Constellation Beer.
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Marcas Constellation
stocks have been choking higher in recent months, and Goldman Sachs argues that the alcohol and spirits maker’s shares are paying off for more gains, behind strong finances and brands which is growing.
Analyst Bonnie Herzog confirmed the Buy level and $ 275 price target on Brand Constellation (ticker: STZ) while adding to her company’s Buy Conviction list, announcing “faster and more profitable growth to come.”
She says the stock’s valuation is “strong,” trading at 18.5-hour earnings next year, market declines and historical levels. That looks particularly appealing, she notes, as Constellation Brands looks like “one of the best growth stories in the U.S. Staples world and is beneficially drawn to the opportunities most attractive in alcoholic beverages. ”
It sees six key catalysts that can drive Constellation Brands ’mainline growth to an annual growth rate of 7.5% by fiscal 2026, up from 4.5% in recent years. The first is its Modelo brand: The popular beer has been experiencing a major move, a move that Herzog sees to continue and carry it to $ 4 billion in sales by fiscal 2026, on assist with new distribution and product and packaging innovation.
She’s also optimistic about Corona Hard Seltzer, which she believes will more than double the load this year, inspired by fewer capacity constraints and new flavors. Third, and relatedly, Constellation Brands will benefit from fewer outside stocks: Its recent work showed that only 43% of sales partners experience these investment issues. in January, down from two-thirds in October.
Fourth, Herzog emphasizes the sale of Constellation Brands ’wine and spirits industry, which removed stock diversion and allowed the company to focus on accelerating their remaining brands. in this place. She believes its wine and spirits sector, which has seen slow sales in recent years, will rebalance revenues with a 4% annual growth rate through the 2026 crown.
All of these initiatives will follow stronger operating margins, which it estimates will reach 36.9% in fiscal 2026, an expansion of 285 basis points. And finally, Herzog expects repurchases of shares to begin soon, if they haven’t already – “there is a strong commitment and management commitment to return money to shareholders. ”
Constellation brands gained early in the year from strong third-quarter fiscal results, and other analysts have been attractive as well, even if not as bullish as Herzog.
Constellation Brand stock is up 1.5% to $ 232 in recent trading. It has gained 4.4% so far, and 14.3% in the last 12 months.
Write to Teresa Rivas at [email protected]