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Things to Note Before Constellation Brands' (STZ) Q1 Earnings

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·5 min read
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Constellation Brands, Inc. STZ is scheduled to release first-quarter fiscal 2023 results on Jun 30, 2022. The alcoholic beverage bigwig is expected to deliver top and bottom-line growth in the to-be-reported quarter.

The Zacks Consensus Estimate for the company’s fiscal first-quarter earnings is pegged at $2.50 per share, indicating 7.3% growth from the year-ago quarter’s reported figure. The consensus mark has moved down 0.8% in the past seven days. The consensus mark for revenues is pegged at $2.19 billion, suggesting an 8% increase from the prior-year quarter’s reported figure.
 
In the last reported quarter, the alcohol behemoth delivered an earnings surprise of 10.2%. Also, its bottom line beat estimates by 2.6%, on average, over the trailing four quarters.

Constellation Brands Inc Price and EPS Surprise

 

Constellation Brands Inc Price and EPS Surprise
Constellation Brands Inc Price and EPS Surprise

Constellation Brands Inc price-eps-surprise | Constellation Brands Inc Quote

Key Factors to Note

Constellation Brands has been gaining from continued growth in the beer business and robust consumer demand for its iconic brands. Depletion volume growth, stemming from strength in Modelo Especial and Corona Extra, has been aiding the top line. Strength in high-end Power Brands, including The Prisoner Brand Family, Kim Crawford and Meiomi, have also been key growth drivers.

Constellation Brands has been significantly gaining from strength in the beer business. Also, its premiumization strategy has been playing out well. These are likely to have aided the top line in the to-be-reported quarter.

The beer segment has been experiencing growth from premiumization, driven by growth in traditional beer as well as flavors category, including seltzers, flavored beer, RTD spirits and flavored malt beverages. The company has also been making investments to fuel growth of its power brands through innovation, capitalizing on priority, consumer trends, and successful product introductions. The premiumization trends are likely to have contributed meaningfully to STZ’s performance in the fiscal first quarter.

However, softness in the wine & spirits business is expected to have weighed on the fiscal first-quarter performance. Supply-chain headwinds are also likely to have impacted its business. Due to higher commodity prices and inflationary pressure, elevated material costs are anticipated to have acted as deterrents.

Zacks Model

Our proven model does not conclusively predict an earnings beat for Constellation Brands this season. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that’s not the case here. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Constellation Brands has a Zacks Rank #4 (Sell) and an Earnings ESP of -5.01%.

Stocks With Favorable Combination

Here are some companies you may want to consider, as our model shows that these have the right combination of elements to post an earnings beat this season:

Archer Daniels ADM currently has an Earnings ESP of +3.80% and a Zacks Rank of 1. The company is likely to register an increase in the top and bottom lines when it reports second-quarter 2022 results. The Zacks Consensus Estimate for ADM’s quarterly earnings has moved up by 6.3% in the past 30 days to $1.69 per share. The consensus mark indicates 27.1% growth from the year-ago quarter’s reported number.

You can see the complete list of today’s Zacks #1 Rank stocks here.

Archer Daniels’ top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $25.2 billion, which suggests a rise of 9.8% from the figure reported in the prior-year quarter. ADM has delivered an earnings beat of 22.3%, on average, in the trailing four quarters.

United Natural Foods UNFI currently has an Earnings ESP of +10.09% and a Zacks Rank of 1. The company is likely to register an increase in the top line when it reports fourth-quarter fiscal 2022 results. The Zacks Consensus Estimate for quarterly earnings moved north by 8.6% in the last 30 days to $1.14 per share. However, the consensus estimate indicates a decline of 3.4% from the year-ago quarter's reported number.

United Natural’s top line is expected to have risen year over year. The Zacks Consensus Estimate for UNFI’s quarterly revenues is pegged at $7.2 billion, suggesting a decline of 7.1% from the figure reported in the prior-year quarter. UNFI has delivered an earnings beat of 29.9%, on average, in the trailing four quarters.

Corteva CTVA currently has an Earnings ESP of +8.12% and a Zacks Rank of 3. The Zacks Consensus Estimate for quarterly earnings has been unchanged at $1.46 per share in the past 30 days. The consensus mark for CTVA suggests 4.3% growth from the year-ago quarter’s reported number.

Corteva’s top line is expected to rise year over year. The Zacks Consensus Estimate for quarterly revenues is pegged at $6.2 billion, which suggests a rise of 9.4% from the figure reported in the prior-year quarter. CTVA has delivered an earnings beat of 22.3%, on average, in the trailing four quarters.

Stay on top of upcoming earnings announcements with the Zacks Earnings Calendar.


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