Earnings Preview: Constellation Brands

Jun.26.12 | About: Constellation Brands, (STZ)

Constellation Brands, Inc. (NYSE:STZ) produces and markets beverage alcohol in the United States and internationally. The company's Constellation Wines North America segment produces, markets, and exports wine, as well as sells various wine brands across various categories, including table wine, sparkling wine, and dessert wine.

It is scheduled to report its Q1 2013 results on June 29, 2012, before the market opens.

Technical Overview


Key Metrics

  • Market Cap: 3.43B
  • 52-week trading range: 16.42 - 24.87
  • Trailing P/E: 9.08
  • Forward P/E: 8.61
  • Price/Sales: 1.38
  • Price/Book: 1.41
  • PEG Ratio: 1.08
  • Total Debt: 3.18B
  • Annual dividend yield: N/A
  • Return on Equity: 17.02%
  • Return on Assets: 4.82%

Recent EPS Actuals vs. Estimates

The company has met or beaten analysts' estimates in the last quarters. In the last quarter, it reported $0.69 EPS, beating analyst estimates of $0.39.

The consensus EPS is $0.39 based on 8 analysts' estimates, same as $0.39 a year ago. Revenue estimates are $645.50M, up from $635.00M a year ago. The median target price by analysts for the stock is $25.00.

Average recommendation: Overweight

Source: Marketwatch

Analyst Upgrades and Downgrades

  • On April 9, 2012, UBS reiterated Buy rating for the company.
  • On April 5, 2012, Barclays reiterated Equal Weight rating for the company.

Latest Developments

  • On June 13, 2012, Constellation Brands, Inc., the world's leading premium wine company, announced that it has aligned its operating companies in the U.S., Canada and New Zealand under the name "Constellation Brands" to better reflect its strategy to move to a more unified organization. The company also refreshed its logo to create a more modern look.
  • On May 18, 2012, Constellation Brands, Inc., announced that it is nearing completion of the second phase of its distribution transition with the signing of multi-year agreements with Republic National Distributing Company (RNDC), Young's Market Company, Johnson Brothers and Horizon Beverage Company.
  • On May 3, 2012, Constellation Brands, Inc., announced that it has entered into a new senior credit facility. The new agreement includes an $850 million five-year revolving credit facility, a five-year $550 million term loan A and a seven-year $250 million term loan A-1.
  • On April 17, 2012, Reuters reported that Constellation Brands Inc has completed the sale of $600 million aggregate principal amount of 6% Senior Notes due 2022. The notes are senior obligations that rank equally with all of the Company's other senior unsecured indebtedness.

Competitors

Constellation Brands Inc. operates in Beverages - Wineries & Distillers industry. The company could be compared to Castle Brands Inc. (NYSEMKT:ROX), Boston Beer Co. Inc. (NYSE:SAM), Molson Coors Brewing Company (NYSE:TAP), and Willamette Valley Vineyards Inc. (NASDAQ:WVVI). Below is the table comparison of the most important ratios between these companies and the industry.

Below is the chart comparison with the stock price changes as a percentage for the selected companies and S&P 500 index for the last one-year period.

Click to enlarge

STZ ChartClick to enlarge

STZ data by YCharts

Competitors' Latest Development

  • On June 18, 2012, Molson Coors Brewing Co announced that it had completed previously announced acquisition of StarBev for approximately EUR2.65 billion. Mark Hunter, the CEO of Molson Coors UK & Ireland business, will serve as Chief Executive Officer of the new business unit, which has been renamed Molson Coors Central Europe.
  • On May 11, 2012, Willamette Valley Vineyard reported in its Form 8-K that on May 4, 2012, R. Steven Caldwell was terminated as the Chief Financial Officer (NASDAQ:CFO) of Willamette Valley Vineyards, Inc.
  • On May 3, 2012, Molson Coors Brewing Co announced that it had completed an offering of debt securities totaling $1.9 billion, the proceeds of which will be used to finance its acquisition of Central and Eastern European brewerStarBev L.P., as previously announced on April 3, 2012.
  • On May 2, 2012, The Boston Beer Company, Inc. reaffirmed fiscal 2012 guidance of earnings per diluted share (NYSEARCA:EPS) of between $3.80-$4.20. According to I/B/E/S Estimates, analysts are expecting the company to report EPS of $4.15 for fiscal 2012.
  • On April 3, 2012, Molson Coors Brewing Co announced that it had signed a definitive agreement with StarBev L.P., owned by funds (CVC Funds) advised by CVC Capital Partners Limited (NYSE:CVC) and StarBev management, to acquire StarBev for EUR2.65 billion ($3.54 billion).

Sources: Yahoo Finance, Google Finance, Marketwatch, Finviz, Reuters.

Disclosure: I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours.