Constellation Brands (STZ) Dips More Than Broader Markets: What You Should Know

Constellation Brands (STZ) closed at $181.28 in the latest trading session, marking a -1.29% move from the prior day. This change lagged the S&P 500's 0.32% loss on the day. Meanwhile, the Dow lost 0.38%, and the Nasdaq, a tech-heavy index, lost 0.4%.

Prior to today's trading, shares of the wine, liquor and beer company had lost 3.48% over the past month. This has lagged the Consumer Staples sector's gain of 2.59% and the S&P 500's gain of 2.51% in that time.

Wall Street will be looking for positivity from STZ as it approaches its next earnings report date. This is expected to be January 8, 2020. The company is expected to report EPS of $1.91, down 19.41% from the prior-year quarter. Meanwhile, the Zacks Consensus Estimate for revenue is projecting net sales of $1.95 billion, down 1.2% from the year-ago period.

Looking at the full year, our Zacks Consensus Estimates suggest analysts are expecting earnings of $8.41 per share and revenue of $8.05 billion. These totals would mark changes of -9.38% and -0.86%, respectively, from last year.

Any recent changes to analyst estimates for STZ should also be noted by investors. These revisions typically reflect the latest short-term business trends, which can change frequently. As such, positive estimate revisions reflect analyst optimism about the company's business and profitability.

Our research shows that these estimate changes are directly correlated with near-term stock prices. Investors can capitalize on this by using the Zacks Rank. This model considers these estimate changes and provides a simple, actionable rating system.

Ranging from #1 (Strong Buy) to #5 (Strong Sell), the Zacks Rank system has a proven, outside-audited track record of outperformance, with #1 stocks returning an average of +25% annually since 1988. Within the past 30 days, our consensus EPS projection has moved 0.45% lower. STZ is holding a Zacks Rank of #4 (Sell) right now.

Valuation is also important, so investors should note that STZ has a Forward P/E ratio of 21.83 right now. Its industry sports an average Forward P/E of 24.02, so we one might conclude that STZ is trading at a discount comparatively.

Meanwhile, STZ's PEG ratio is currently 2.77. The PEG ratio is similar to the widely-used P/E ratio, but this metric also takes the company's expected earnings growth rate into account. The Beverages - Alcohol industry currently had an average PEG ratio of 3.16 as of yesterday's close.

The Beverages - Alcohol industry is part of the Consumer Staples sector. This industry currently has a Zacks Industry Rank of 209, which puts it in the bottom 19% of all 250+ industries.

The Zacks Industry Rank gauges the strength of our individual industry groups by measuring the average Zacks Rank of the individual stocks within the groups. Our research shows that the top 50% rated industries outperform the bottom half by a factor of 2 to 1.

You can find more information on all of these metrics, and much more, on Zacks.com.

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