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Constellation Brands Likely to Report In-Line Quarterly Results, Reiterate Outlook, RBC Says

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Constellation Brands Likely to Report In-Line Quarterly Results, Reiterate Outlook, RBC Says

Constellation Brands (STZ) is expected to report fiscal first-quarter results in line with Wall Street estimates and reiterate its full-year outlook, RBC Capital Markets said in a Friday note.

The beer and wine company's shares have come under pressure due to sequential category volume slowdowns driven by economic headwinds, including higher gas prices and weather, with a heavier impact on its West Coast exposure, RBC said. The brokerage expects flat beer depletions for the quarter and sees the company meeting Wall Street expectations on both revenue and earnings.

The maker of Modelo and Corona is scheduled to report fiscal first-quarter results on June 30. Analysts polled by FactSet expect the company to post adjusted earnings per share of $3.20 and revenue of $2.39 billion.

The brokerage said Constellation Brands' fiscal 2027 guidance was conservative despite concerns around softer volume trends. It views the pressure as cyclical rather than any weakening in brand strength or consumer demand. RBC expects the company to reiterate its guidance, with World Cup activation and easing gas prices seen as near-term catalysts for beer volumes.

In April, Constellation Brands set its fiscal 2027 comparable earnings guidance at $11.20 to $11.90 per share, a range that came in below Wall Street expectations at the time.

"Overall, we see risk/reward as favorable -- an in-line quarter, guidance reiteration, and a more optimistic volume tone should be sufficient," RBC analyst Nik Modi said in the note.

RBC has an Outperform rating on Constellation Brands shares and a price target of $185.

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