Constellation Brands, Inc. (NYSE:STZ) is one of the stocks Jim Cramer discussed, along with recent market rotation. Cramer showed mixed feelings around the stock during the episode, as he remarked:
“I gotta tell you, Constellation Brands looks a heck of a lot more attractive here, down here, I should say, than a year ago. This thing was trading at about 20 times earnings when things started going wrong in 2024. Now, it sells for just 13 times this year’s earnings estimate. It pays a decent dividend now, and that wasn’t because it was raised. It was because the stock went lower, 2.8%. So is the worst over? Look, I’m open to the possibility, but I don’t think we’re there yet. See, just because a quarter’s better than expected, that doesn’t mean it’s good…
Of course, it’s the beer business that really matters here. It makes up roughly 90% of its sales. Beer revenue came in a little light, mostly driven by lower volumes, although that was partially offset by higher pricing. Now, you really want it to be the other way around. This one is down so much, those numbers looked up to me, though… Again, none of this is super encouraging, but I think it’s good to see shipments so close to depletions because that means the wholesalers are no longer trying to lower their inventory. Very big positive in terms of branding…
Overall, this was an encouraging quarter from Constellation Brands. Management is talking a lot these days about controlling the controllables, and I think that’s the right perspective because these guys have no control over tariffs. They have no control over immigration policy. I am glad they are not over-promising either. So the bottom line: Look, I’m not ready to pound the table on Constellation Brands again. I’d like to see their volume start rising before going positive. But I am open to the idea that this comeback can maybe be real and that you get a trade here. The expectations are low enough. The stock’s multiple’s low enough, and the core business is stabilizing, if not yet improving. Too soon for me, but I don’t think you’re crazy if you want to start a small position, trading or otherwise, in Constellation Brands, STZ.”
Pixabay/Public Domain
Constellation Brands, Inc. (NYSE:STZ) sells beer, wine, and spirits, with beer brands such as Corona, Modelo, Pacifico, and Victoria. Its portfolio also includes wine and spirits labels, including Robert Mondavi Winery, Kim Crawford, The Prisoner Wine Company, and SVEDKA.
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Disclosure: None. This article is originally published at Insider Monkey.
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