Constellation Brands (NYSE: $STZ) reported its Q4 fiscal 2025 results, posting earnings of $2.63 per share. This exceeded the Zacks Consensus Estimate of $2.28, marking an earnings surprise of 15.35%. In the same quarter last year, the company reported $2.26 per share.
Revenue for the quarter reached $2.16 billion, above analysts’ expectations of $2.13 billion, showing a 1.53% surprise. This is an improvement over the prior year’s revenue of $2.14 billion. However, this is only the second time in four quarters the company has beaten revenue estimates.
Three of the last four quarters delivered earnings above expectations. However, the prior quarter fell short by 2.69%, as STZ earned $3.25 against a projected $3.34.
Despite strong Q4 figures, STZ shares have dropped 22.6% year-to-date, while the S&P 500 declined 15.3% over the same period. The stock currently trades at $183.40, closing +7.28% higher on April 9. Its Zacks Rank #4 (Sell) suggests possible underperformance in the near term.
Looking ahead, analysts estimate EPS of $3.70 and revenue of $2.68 billion for the next quarter. For the full fiscal year, the forecast is $13.58 EPS and $10.35 billion in revenue. Expectations remain high, with long-term earnings projected to reach $2.6 billion by 2028.
The company’s innovation in premium beverages and expanded distribution may drive future gains. Still, reduced consumer spending could limit near-term growth. STZ currently trades below its consensus price target of $229.24, suggesting a potential upside of 19.4%.
The broader Beverages – Alcohol industry, to which STZ belongs, ranks in the bottom 20% of Zacks industries. This indicates sector-wide challenges that may weigh on growth.
Technical Analysis
Technically, STZ is currently trading in a range between $160 and $188. The stock must break above $188 for a bullish continuation. If rejected, it could return to the $160 support.
A visible gap exists from $201 to $207, which may act as a price magnet if bullish momentum is confirmed. However, the price remains under the 50-day, 100-day, and 200-day moving averages, which sit at $176, $19,9, and $222, respectively. These values indicate ongoing bearish momentum.
Momentum needs confirmation through a decisive break above $188, turning resistance into support. If that happens, buyers may push toward the gap fill near $207.
The chart shows an ascending trendline drawn from the recent swing low, which was nearly $160 up to current prices. This trendline signals buyer strength returning gradually after months of selling pressure.
Key support levels include $160 while Immediate resistance sits at $188, with the next barrier at $207 gap.
The Relative Strength Index (RSI) is approaching 60, currently at 54, still way below the overbought zone. This suggests more room for upside if momentum holds. Volume has also picked up recently, supporting the bullish attempt.
Is It A Good Time To Buy Constellation Brands?
Despite short-term weakness and a bearish technical structure, STZ may present a medium- to long-term buying opportunity for value and growth-oriented investors. The stock is currently trading well below its consensus price target of $229.24, offering a nearly 20% potential upside.
Fundamentally, the Q4 beat on both earnings and revenue, combined with growing strength in the premium beverage segment, supports a positive long-term outlook. Additionally, rising volume and an RSI below 60 suggest bullish momentum is building.
However, the stock remains below key moving averages and faces macroeconomic headwinds such as reduced discretionary spending. Its Zacks Rank #4 (Sell) also signals potential near-term underperformance.
For those with a short-term outlook, waiting for a confirmation break above $188 with strong volume may offer a safer entry. Long-term investors may consider accumulating shares gradually while keeping a close eye on support at $160 and overall industry performance.
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