Jim Cramer’s Game Plan For This Week: 7 Stocks in Focus

1. Constellation Brands, Inc. (NYSE:STZ)

Number of Hedge Fund Holders: 42

Constellation Brands, Inc. (NYSE:STZ) is one of the stocks in Jim Cramer’s game plan for this week. Cramer started his game plan with the stock, as he remarked:

“Monday, Constellation Brands, STZ, reports. The company has fallen out of grace along with the rest of the alcohol plays. CEO Bill Newlands acknowledged on the last earnings call that the company is being impacted by ICE raids in popular shopping destinations. The declining volumes has matched the decline in the stock. Constellation has been trying to bounce of late. At 12 times earnings, it’s the cheapest I’ve ever seen it, but the multiple contraction seems justified given the company’s recent track record as well as the rise of GLP-1s, which reduce craving for everything, including alcohol.”

Constellation Brands, Inc. (NYSE:STZ) produces and markets beer, wine, and spirits under brands such as Corona, Modelo, Robert Mondavi, Kim Crawford, and SVEDKA. During the June 27 episode, Cramer called it a “fallen idol,” as he commented:

“On Tuesday, we get results from former market darling, Constellation Brands. What a fallen idol. There’s so much to unpack here because this consumer packaged goods company is a microcosm of what’s gone wrong with this now pathetic group that used to be the place to go when there’s a slowdown. First: Constellation is an alcohol company, so all their products are being hurt by the GLP-1 drugs, which can blunt your craving for booze. That’s especially true for the big beers, which are Modelo [and] Corona, and then a new popular favorite, Pacifico.

Second: Increasingly, surveys show that there’s a switch from beer to cannabis because smoking weed is theoretically less fattening. I say theoretically because while alcohol has way more calories, it doesn’t give you the munchies. This younger generation cares more about their health than previous ones. Sounds fanciful, but it is true. Third: Constellation said its sales have been hurt by concerns in the Hispanic community about mass deportations. The stock’s been steadily declining all quarter.

It’s been downgraded by analysts jumping ship from the company that used to beat and raise and beat and raise over and over and over again. Used to be a big position for my trust. That was then. Now, we expect Constellation to miss. We’ll get the results Tuesday night, and the conference call will start on Wednesday morning. You’ll probably see the stock jump up when it reports. That’s what it typically does, and then it declines through the rest of the day. So let’s be careful.”

While we acknowledge the potential of Constellation Brands, Inc. (NYSE:STZ) as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than STZ and that has 100x upside potential, check out our report about this cheapest AI stock.

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