Constellation Brands (STZ) Stock

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If the beer distributor increases prices due to new tariffs, brands such as Corona and Modelo may seem less appealing compared to American brands like Bud Light.

Constellation Brands' stock dropped after President-elect Donald Trump revealed his intention to impose a 25% tariff on imports from Mexico. The company produces all of its beers, which account for 86% of its sales, in Mexico.

Constellation Brands focuses on its premium products and strong beer selection to promote growth, while also tackling issues in its wine and spirits division.

In 2023, consumers who identify as Hispanic or Latino made up 32.5% of Constellation Brands' sales, according to data from Numerator and Jefferies. The ongoing support from these customers has helped Modelo maintain its position as the top-selling beer in the U.S. by dollar share.

ROCHESTER, N.Y., Oct. 08, 2024 (GLOBE NEWSWIRE) -- Constellation Brands (NYSE: STZ), a top company in the beverage alcohol industry, has announced that E. Yuri Hermida has been appointed as the new Executive Vice President and Chief Growth & Strategy Officer. In this position, Hermida will oversee areas such as Consumer Insights & Innovation, Digital Transformation, Media, New Business Ventures, and Strategy & Analytics. He will report to Bill Newlands, the President and CEO, and will also be part of the company's executive management committee.

Constellation Brands Inc. (NYSE: STZ) produces and sells beer, wine, and spirits. Many people recognize its range of alcoholic beverages from visits to sports bars, dining out at restaurants, or enjoying drinks at summer barbecues.

I still recommend buying Constellation Brands because I anticipate earnings growth of over 10%, thanks to better profit margins and rising demand. The company had impressive Q2 results, with adjusted earnings per share of $4.32, surpassing expectations, and a notable increase in EBIT margins, especially in the beer sector. Although beer sales growth has been slow, Constellation Brands is gaining market share, and recent data suggests that demand is improving, signaling a recovery.

Last week, Constellation Brands Inc. STZ announced its second-quarter adjusted earnings per share were $4.32, which was higher than the analysts' expectation of $4.08. The company's quarterly revenue reached $2.92 billion, surpassing the anticipated $2.90 billion.