Entering text into the input field will update the search result below

From Corona To Cannabis, Constellation Isn't Going Anywhere Anytime Soon

Altimetry profile picture


  • By amassing a collection of recognizable alcohol brands over the past decade, Constellation has seen robust profitability and stable growth.
  • Recently, the market has been quick to discount the company amidst coronavirus-related shutdowns, despite the firm’s limited restaurant and bar exposure and an increase in beer and liquor sales across.
  • Additionally, the firm’s position in Canopy Growth offers an opportunity for investors seeking the enormous upside of the cannabis industry, but looking for less volatility and potential headline risks.

Even though Constellation Brands (NYSE:STZ) has faced some coronavirus-related headwinds as a result of restaurant and bar closures, the company is well-positioned for long-term stock appreciation. With increasing online alcohol shopping and beer sales growth at liquor stores, Constellation has been able to partially offset recent downturns. Furthermore, being the majority shareholder of Canopy could prove to be valuable in the future, as management has already started to improve the cannabis company’s strategy. As such, the company is in a favorable position to sustain its historical performance, suggesting equity upside may be likely.

A Growing Portfolio of Popular Brands

Since the firm’s announced acquisition of Grupo Modelo’s U.S. beer business in 2013, Constellation Brands, a producer, importer, and marketer of beer, wine, and spirits, has seen rapid stock price growth, rising from just $30/share in February 2013 to historical highs of $230+/share in April 2018, an increase of over 600%. Since then, momentum has stalled, with the firm’s stock price declining below $170/share to start 2019, as the firm struggled to refresh its alcoholic beverage portfolio and as its investment in Canopy Growth struggled to take off. Recently, a stock price resurgence led STZ to recover towards all-time highs again in early 2020, before the coronavirus pandemic temporarily derailed its progress.

This historically strong performance can be largely attributed to the highly diverse and highly profitable alcohol portfolio the firm has constructed over the past two decades. Constellation started as a bulk wine distributor, before gradually shifting its business model and building an impressive collection of beer, wine, and spirits. This includes staple beer brands from the Grupo Modelo acquisition, such as Corona and the namesake Modelo, as well as craft brewers such as Funky Buddha, that appeal to a variety of beer drinkers and has solidified Constellation as the US market leader for Mexican beers. In addition, the firm

This article was written by

Altimetry profile picture
Altimetry is a boutique financial research and publishing firm providing individual investors with unique, unbiased investment recommendations and analytics.Sign up for our daily newsletter hereAssociated Accounts: Altimetry's data is provided by SA contributor Valens Research

Analyst’s Disclosure: I/we have no positions in any stocks mentioned, and no plans to initiate any positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it. I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

Recommended For You

Comments (13)

Studies of Inhaled Version RDV
STZ needs to report earnings soon, and all 3 core businesses are facing headwinds.
1. Wine, comatose after selling to Gallo and being under investigation by USgov. It has a long history of irregularities in US and overseas.
2. Beer Corona ...Corona virus did literally a killing, wouldn't expect much from such brand.
3. Weed ...Canopy cleared loses after losses billions of the books...The investors wake up to the flop.

STZ is in sad need of an organ transplant.
EliasMouawad profile picture
"coronavirus will not cripple the company"
But it will cripple the general market. The virus is still spreading fast in Florida, Mexico, Brazil, Chile, Peru, India, Saudi Arabia, South Africa...
MaryLeach78 profile picture
I love me some $STZ on the beer side of things. Constellation Brands is a great company. $CGC is a good but $ACB has more growth potential on the cannabis side. Aurora has the "Cult" appeal. Which is more valuable for a sector down on its luck then anything.
ippotr profile picture
Investing in the destruction of our youth. Money is the root of all evil.......
PT Larry profile picture
Corona seltzers are super refreshing, a very different experience. And the "mango" flavored seltzers have an unbelievable great taste. I am a customer.

Thanks for the article.

Long STZ and CGC
ISCNF anyone?
They were down today despite positive news. Picked up 5000 more shares today. Israel is one of only 3 countries in the world with license to export cannabis.
What a bloodbath for MJ stocks today. Let along the Dow down almost 1,500.... Good day to average down on your MJ stocks.
mookdoc profile picture
Norsk64 profile picture
Great. Anymore good news today? Tomorrow there will be a write up on how great CGC is.
Jwit profile picture
You bet!!!!
Absolutely Agree
Disagree with this article? Submit your own. To report a factual error in this article, . Your feedback matters to us!

About STZ

SymbolLast Price% Chg
Market Cap
Yield (TTM)
Rev Growth (YoY)
Short Interest
Prev. Close
Compare to Peers

More on STZ

Related Stocks

SymbolLast Price% Chg
To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.