Constellation Brands' (STZ) fiscal Q1 results are not expected to be a "meaningful catalyst," but the fiscal 2027 guidance appears "achievable," UBS Securities said in a note emailed Wednesday.
Earlier in the year, UBS' conversations suggested sentiment was constructive on Constellation Brands, given a better start to the year from a tracked channel perspective, as well as expectations of easier comparisons and demand benefits from the World Cup and the 250th US anniversary, driving stronger revenue growth, according to the note.
However, Constellation Brands shares were seen underperforming as demand trends have significantly softened for the last two months, UBS said.
UBS projects fiscal Q1 beer depletions to be down 1%, versus a prior expectation of 1% growth and Street estimates of 0.3% growth. It also expects total beer sales to fall 0.5%.
The company currently forecasts fiscal 2027 earnings per share of $11.20 to $11.90, versus UBS forecast of $11.72.
Constellation Brands is scheduled to report fiscal Q1 results after the bell on June 30.
UBS kept a buy rating on Constellation Brands and lowered the price target to $175 from $186.
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