Fact based stock research
Constellation Brands (NYSE:STZ)

US21036P1084

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

(NEW) Sentiment - quantifies professional analyst ratings and holdings as well as market pulse. Green = positive sentiment; red = skepticism (Only available to Premium Subscribers).

(NEW) 360° View - the ultimate rating with all financial and non-financial indicators.

Constellation Brands stock research in summary

cbrands.com

ANALYSIS: With an Obermatt Combined Rank of 31 (worse than 69% compared with investment alternatives), Constellation Brands (Distillers & Vintners, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Constellation Brands are low in value (priced high) with a consolidated Value Rank of 41 (worse than 59% of alternatives), show below-average growth (Growth Rank of 49), and are riskily financed (Safety Rank of 35), which means above-average debt burdens. ...read more

RECOMMENDATION: A Combined Rank of 31, is a hold recommendation based on Constellation Brands's financial characteristics. As the company Constellation Brands's key financial metrics all exhibit below-average performance, such as low value (Obermatt Value Rank of 41), low growth (Obermatt Growth Rank of 49), and risky financing practices (Obermatt Safety Rank of 35), it is a somewhat questionable stock investment, where the risk of paying too much for the shares is significant, unless the company has an exceptionally bright future. Such poor financial performance sometimes indicates that the company's business is all concentrated in some distant future. This is sometimes the case for high-tech or biotechnology companies. If they own properties that only provide cash flows in the future, the stock may look excessively expensive and risky today. In such cases, the Obermatt Method has limited value as it is based on facts we can observe today. If the facts are all in the future, stock investing becomes guesswork, and this should only be a driver in a limited number of investments that should only amount to a small fraction of a safe portfolio. Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	41
Growth Rank	49
Safety Rank	35
Combined Rank	31

Country	USA
Industry	Distillers & Vintners
Index	S&P US Consumer, S&P US Food & Beverage, S&P 500
Size class	X-Large

This stock has achievements: Top 10 Stock.

19-Dec-2024. Stock data may be delayed. Log in or sign up to get the most recent research.

Further information

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Review the performance ranks of the individual metrics that form each investment strategy.

Research History: Constellation Brands

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	61	35	24	41
GROWTH
GROWTH	26	69	89	49
SAFETY
SAFETY	9	26	12	35
SENTIMENT
SENTIMENT	n/a	26	72	^new
360° VIEW
360° VIEW	n/a	23	48	^new

Most recent update of the stock research: 19-Dec-2024. Financial reporting date used for calculating ranks: 31-Aug-2024. Stock research history is based on the Obermatt Method. The higher the rank, the better Constellation Brands is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	61	35	24	41
GROWTH
GROWTH	26	69	89	49
SAFETY
SAFETY	9	26	12	35
COMBINED
COMBINED	3	37	25	31

Last update of combined financial performance: 19-Dec-2024. Stock analysis on combined financial performance: The higher the rank of Constellation Brands the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 41 (worse than 59% compared with alternatives), Constellation Brands shares are more expensive than the average comparable stock. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Constellation Brands. Only Price-to-Profit (also referred to as price-earnings, P/E) indicates good stock value with a rank of 61, which means that the stock price compared with what market professionals expect for future profits is lower than for 61% of comparable companies, indicating a good value concerning Constellation Brands's profit levels. But Price-to-Sales is 11 which means that the stock price compared with what market professionals expect for future profits is higher than for 89% of comparable companies, indicating a low value concerning Constellation Brands's profit levels. The same is valid for Price-to-Book Capital (also referred to as market-to-book ratio) with a Price-to-Book Rank of 35 and for dividend yield, which is lower than for 57% of comparable companies, making the stock more expensive as regards to the company's expected dividend payouts. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 41, is a hold recommendation based on Constellation Brands's stock price compared with the company's operational size and dividend yields. Can we rely on only one good value indicator? Only if we know the company well. In this case, a high Price-to-Profit Rank, while Price-to-Sales and Price-to-Book are both below the market typical levels, means that the company can charge higher prices for its products and needs less capital to produce them. If this is sustainable, then Constellation Brands is a good investment because profits count most in enterprise valuations. The low dividend yield indicates that the company is confident it can do something with the generated cash that is more valuable than paying the profits out to the shareholders in the form of dividends. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	59	15	11	11
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	41	49	42	61
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	40	42	27	35
DIVIDEND YIELD
DIVIDEND YIELD	64	49	50	43
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	61	35	24	41

Last update of Value Rank: 19-Dec-2024. Stock analysis on value ratios: The higher the rank, the lower the value ratio of Constellation Brands; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 49 (better than 49% compared with alternatives), Constellation Brands shows a below-average growth dynamic in its industry. There is limited momentum in this company. The Growth Rank is based on consolidating four value indicators, with half of the indicators below and half above average for Constellation Brands. Sales Growth has a rank of 78, which means that, currently, professionals expect the company to grow more than 78% of its competitors. Profit Growth with a rank of 72 is also above average. But Capital Growth has only a rank of 9, and Stock Returns with 47 are also below-average. Stock returns for Constellation Brands have recently been below 53% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 49, is a hold recommendation for growth and momentum investors. Are investors forecasting troubles based on the lack of operating investment activity at the company? This could be one explanation as to why stock returns are low. But stock returns can also be the result of correcting an error in the past, in this case, an overly optimistic outlook on the future, which is now more realistic. The Value Ranks may confirm such a picture. The more important growth indicators are revenues and profits, which are both above average for Constellation Brands. This is a positive sign from the company's operational side and may give investors courage, despite the poor recent stock price performance. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with the Obermatt Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case, especially since the growth performance is mixed here. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	24	64	80	78
PROFIT GROWTH
PROFIT GROWTH	46	39	49	72
CAPITAL GROWTH
CAPITAL GROWTH	n/a	78	94	9
STOCK RETURNS
STOCK RETURNS	40	57	67	47
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	26	69	89	49

Last update of Growth Rank: 19-Dec-2024. Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Constellation Brands.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 35 (better than 35% compared with alternatives), the company Constellation Brands has financing practices on the riskier side, which means that their overall debt burden is above the industry average. This doesn't mean that the business of Constellation Brands is also risky, it only means that the company is on the riskier side in respect to bankruptcy in case things turn sour, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with just one indicator above average for Constellation Brands. Liquidity is at 55, meaning the company generates more profit to service its debt than 55% of its competitors. This indicates that the company is safer when it comes to debt service. But Refinancing is riskier at a rank of 29, which means that the portion of the debt that is about to be refinanced is above average. It has more debt in the refinancing stage than 71% of its competitors. Leverage is also high at a rank of 30, which means that the company has an above-average debt-to-equity ratio. It has more debt than 70% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 35 (worse than 65% compared with alternatives), Constellation Brands has a financing structure that is riskier than that of its competitors. High Leverage (a low Obermatt Leverage Rank) is good in good times, because it usually indicates that shareholders get higher returns. The good Liquidity performance of the company is an indicator that this is the case. However, if you expect an economic downturn, you may stay clear of this stock because they have an above-average debt level that needs refinancing soon. If the company is sailing with good winds, as may be visible from the Growth and Sentiment performance, the refinancing risk may be lower than the low Refinancing rank suggests. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	24	32	22	30
REFINANCING
REFINANCING	36	23	25	29
LIQUIDITY
LIQUIDITY	35	51	44	55
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	9	26	12	35

Last update of Safety Rank: 19-Dec-2024. Stock analysis on safety metrics: The higher the rank, the lower the leverage of Constellation Brands and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	63	85	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	3	20	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	64	84	^new
MARKET PULSE
MARKET PULSE	n/a	42	53	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	26	72	^new

Last update of Sentiment Rank: 19-Dec-2024. Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Constellation Brands.
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