Latest news with #ModeloEspecial
Yahoo
3 days ago
- Business
- Yahoo
Tariffs Are Rocking This Dividend Stock, But Analysts Still Think It's a ‘Buy'
In March 2025, the U.S. government imposed a 25% tariff on imported aluminum before raising levies to 50% in June. This creates new challenges for companies that depend on metal packaging, such as for companies that sell canned sodas and beers. Constellation Brands (STZ), the $30.4 billion company behind big names like Corona, Modelo, and Kim Crawford, is feeling the pressure more than most. Constellation has dropped 35% from its 52-week high, falling behind the rest of the consumer defensive sector. The latest quarterly report revealed the significant impact of these tariffs, with revenue down 6% year-over-year to $2.52 billion. Up Nearly 20% in a Month, Is This Turnaround Dividend Stock Still a Buy in July? 3 Dividend Kings You'll Wish You Bought Before 2025 Ends Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. Yet, despite the near-term headwinds, analysts remain notably bullish on Constellation's prospects as a resilient dividend payer. What's driving their optimism, and does this dividend stock still deserve a place in your portfolio? Let's find out. Constellation Brands (STZ) is a major player in the beverage industry, known for its popular beer, wine, and spirits brands. Even with this approach, the stock has struggled, dropping more than 32% over the past year and nearly 23% since the start of the year as investors worry about rising costs and weaker earnings. This caution shows up in the numbers, with Constellation's forward P/E at 13.5x, which is lower than the sector average of 16.62x, suggesting the stock is trading at a discount, likely because the market expects more challenges ahead. The company's recent financial results show why investors are concerned. In the first quarter of fiscal 2026, net sales fell 6% to $2.52 billion. Operating income decreased 24% to $714 million, and net income declined sharply by 41% to $516 million, as aluminum tariffs and higher costs eroded profits. On the bright side, free cash flow rose 41% to $444 million, driven by the timing of brewery investments, and the company continued to buy back shares, returning $381 million to shareholders through June. Constellation Brands isn't just sitting back while tariffs make things tough. The company recently sold off its mainstream wine brands to focus on higher-growth, higher-margin labels, shifting its attention to wines mostly priced above $15. This move shows Constellation is betting that people want better quality, not just more options. Its beer business is now the main driver, accounting for over 80% of total sales. Modelo Especial, which is now the top-selling beer in the U.S., along with Corona and Pacifico, is expected to help push beer sales up by as much as 3% in fiscal 2026. The company is also looking outside of alcohol, putting money into Hiyo, a non-alcoholic drink brand, to catch the growing interest in alcohol-free options. This helps Constellation reach new customers and makes the business less dependent on any one part of the market. These choices help support Constellation's dividend, even while profits are under pressure. The current yield is 2.4%, backed by a forward payout ratio of 29.8% and five straight years of dividend increases. Its yield is above the consumer staples average of 1.89%, and its steady approach to returning money to shareholders suggests its dividend still has room to grow. Heading into the second half of the year, Constellation has set its fiscal 2026 earnings outlook between $12.07 and $12.37 per share and is sticking with its targets for operating cash flow of $2.7 billion to $2.8 billion and free cash flow of $1.5 billion to $1.6 billion. Even though the company is still dealing with the hit from aluminum tariffs, some of Wall Street's biggest names are standing by their positive calls. RBC Capital's Nik Modi has kept his 'Buy' rating and a price target of $233, implying 35% upside. Jefferies has also upgraded the stock from 'Hold' to 'Buy' and raised its price target to $205, saying the stock looks too cheap right now to ignore. This positive view is shared by analysts across the board. The 22 analysts surveyed rate Constellation a consensus 'Moderate Buy,' and the average price target sits at $205.95. This implies upside potential of 19% from here. Despite the sting from aluminum tariffs and a rough patch in earnings, Constellation Brands is showing the kind of resilience that keeps analysts in its corner. With a sharpened focus on premium, high-margin products and a dividend that's still solid, the company isn't just treading water, it's setting up for a comeback. Wall Street's bullish outlook and the potential for a strong rebound suggest that, for patient investors, this beaten-down dividend stock could offer both stability and upside as the dust settles. On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
3 days ago
- Business
- Yahoo
Tariffs Are Rocking This Dividend Stock, But Analysts Still Think It's a ‘Buy'
In March 2025, the U.S. government imposed a 25% tariff on imported aluminum before raising levies to 50% in June. This creates new challenges for companies that depend on metal packaging, such as for companies that sell canned sodas and beers. Constellation Brands (STZ), the $30.4 billion company behind big names like Corona, Modelo, and Kim Crawford, is feeling the pressure more than most. Constellation has dropped 35% from its 52-week high, falling behind the rest of the consumer defensive sector. The latest quarterly report revealed the significant impact of these tariffs, with revenue down 6% year-over-year to $2.52 billion. Up Nearly 20% in a Month, Is This Turnaround Dividend Stock Still a Buy in July? 3 Dividend Kings You'll Wish You Bought Before 2025 Ends Markets move fast. Keep up by reading our FREE midday Barchart Brief newsletter for exclusive charts, analysis, and headlines. Yet, despite the near-term headwinds, analysts remain notably bullish on Constellation's prospects as a resilient dividend payer. What's driving their optimism, and does this dividend stock still deserve a place in your portfolio? Let's find out. Constellation Brands (STZ) is a major player in the beverage industry, known for its popular beer, wine, and spirits brands. Even with this approach, the stock has struggled, dropping more than 32% over the past year and nearly 23% since the start of the year as investors worry about rising costs and weaker earnings. This caution shows up in the numbers, with Constellation's forward P/E at 13.5x, which is lower than the sector average of 16.62x, suggesting the stock is trading at a discount, likely because the market expects more challenges ahead. The company's recent financial results show why investors are concerned. In the first quarter of fiscal 2026, net sales fell 6% to $2.52 billion. Operating income decreased 24% to $714 million, and net income declined sharply by 41% to $516 million, as aluminum tariffs and higher costs eroded profits. On the bright side, free cash flow rose 41% to $444 million, driven by the timing of brewery investments, and the company continued to buy back shares, returning $381 million to shareholders through June. Constellation Brands isn't just sitting back while tariffs make things tough. The company recently sold off its mainstream wine brands to focus on higher-growth, higher-margin labels, shifting its attention to wines mostly priced above $15. This move shows Constellation is betting that people want better quality, not just more options. Its beer business is now the main driver, accounting for over 80% of total sales. Modelo Especial, which is now the top-selling beer in the U.S., along with Corona and Pacifico, is expected to help push beer sales up by as much as 3% in fiscal 2026. The company is also looking outside of alcohol, putting money into Hiyo, a non-alcoholic drink brand, to catch the growing interest in alcohol-free options. This helps Constellation reach new customers and makes the business less dependent on any one part of the market. These choices help support Constellation's dividend, even while profits are under pressure. The current yield is 2.4%, backed by a forward payout ratio of 29.8% and five straight years of dividend increases. Its yield is above the consumer staples average of 1.89%, and its steady approach to returning money to shareholders suggests its dividend still has room to grow. Heading into the second half of the year, Constellation has set its fiscal 2026 earnings outlook between $12.07 and $12.37 per share and is sticking with its targets for operating cash flow of $2.7 billion to $2.8 billion and free cash flow of $1.5 billion to $1.6 billion. Even though the company is still dealing with the hit from aluminum tariffs, some of Wall Street's biggest names are standing by their positive calls. RBC Capital's Nik Modi has kept his 'Buy' rating and a price target of $233, implying 35% upside. Jefferies has also upgraded the stock from 'Hold' to 'Buy' and raised its price target to $205, saying the stock looks too cheap right now to ignore. This positive view is shared by analysts across the board. The 22 analysts surveyed rate Constellation a consensus 'Moderate Buy,' and the average price target sits at $205.95. This implies upside potential of 19% from here. Despite the sting from aluminum tariffs and a rough patch in earnings, Constellation Brands is showing the kind of resilience that keeps analysts in its corner. With a sharpened focus on premium, high-margin products and a dividend that's still solid, the company isn't just treading water, it's setting up for a comeback. Wall Street's bullish outlook and the potential for a strong rebound suggest that, for patient investors, this beaten-down dividend stock could offer both stability and upside as the dust settles. On the date of publication, Ebube Jones did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
03-07-2025
- Business
- Yahoo
Trump's immigration crackdown is hurting sales of America's most popular beer
Modelo and Corona owner Constellation Brands (STZ) is warning about the impact President Trump's immigration crackdown is having on its beer business. Executives said consumer sentiment deteriorated and socioeconomic headwinds increased during its latest quarter amid rising concerns among its core Hispanic consumer base. "Our Hispanic consumer, which reflects roughly half our business ... is very interested in beer," CEO Bill Newlands said on a call with investors. But, Newlands said, "occasions on which beer is consumed have decreased ... [they're] not going out to eat as much as they had, they're having less social occasions at home." Beer shipment volumes fell 3.3% in the quarter, Constellation said Tuesday. The company's Modelo Especial is the bestselling beer in the US. "A lot of Hispanic consumers are apprehensive to leave their house or ... deviate from their routine or go out," Dave Williams of Bump Williams Consulting told Yahoo Finance. "That results in fewer opportunities and occasions where beer would slot into the mix." "The abruptness of this slowdown ... makes me feel like there's a lot more of it tied to the cyclical aspect of these consumer behaviors due to the recent ICE raids or deportation scares, whether you're legal or not ... that's on top of the other structural aspects that beer brands in general," Williams added. The company also highlighted that while "total population and Hispanic unemployment rates remained at similar levels as in the preceding quarter," employment growth for consumers who tend to be its core audience, like construction workers, saw the sector's growth decelerate "noticeably." According to the Bureau of Labor Statistics, construction job growth has slowed consistently this year, falling to a rate of 1.5% in May, down from 2.8% a year ago. In Constellation Brands' fiscal first quarter 2026 results, the company saw its volume growth for beer decline 3.3%, a tick more than the 2.4% drop Wall Street expected. Its revenue and adjusted earnings also just missed the Street's expectations, coming in at $2.52 billion and $3.22 per share. The Street was looking for $2.55 billion in revenue and earnings of $3.32 per share. For the fiscal year, the company reiterated that it expects organic net sales growth for its beer category to be in the range of 0%-3% growth; it expects wine and spirits sales to decline 17%-20%. Williams said while Modelo Especial still holds the title of top beer brand in the US, it was "coming up against some size and scale challenges" compared to recent years of growth, especially after taking the top spot from Anheuser-Busch's (BUD) Bud Light two years ago. Constellation stock rose over 4.5% on Wednesday, but shares have tumbled so far this year, down more than 20% as investments weigh potential risks, including the impacts to Hispanic consumers and low-income consumers but also lower consumption of alcohol by younger consumers. An advisory from the Biden administration's Surgeon General earlier this year linking alcohol use to cancer, as well as the potential impacts from GLP-1 drugs and tariffs, have also weighed on sentiment toward the stock, JPMorgan analyst Andrea Teixeira said. Constellation Brands brews most of its beer in Mexico and sells it in the US. It has been compliant with the US-Mexico-Canada trade agreement since it was implemented several years ago. About 39% of its beer is shipped in aluminum cans, which are still subject to a 25% tariff. Brooke DiPalma is a senior reporter for Yahoo Finance. Follow her on X at @BrookeDiPalma or email her at bdipalma@ Error in retrieving data Sign in to access your portfolio Error in retrieving data Error in retrieving data Error in retrieving data Error in retrieving data
Yahoo
02-07-2025
- Business
- Yahoo
Corona beer maker Constellation Brands misses quarterly estimates amid tariff woes
(Reuters) -Constellation Brands missed first-quarter sales and profit estimates on Tuesday, as fears of rising tariffs and economic uncertainty prompted consumers to reduce purchases of beers and wines. U.S. alcoholic beverage makers have faced a double blow from the Trump administration's shifting trade policies, a challenge that comes at a time when the industry is already grappling with tepid demand. Corona beer maker reported net sales of $2.52 billion for the quarter ended May 31, compared with analysts' average estimate of $2.55 billion, according to data compiled by LSEG. Tariffs on beer imports, along with the inclusion of beer cans under aluminum tariffs, have impacted liquor makers such as Constellation Brands and Molson Coors. Last month, U.S. President Trump announced plans to double tariffs on imported steel and aluminum to 50% from 25%, intensifying pressure on global steel producers and escalating the trade war. Meanwhile, Constellation Brands has experienced a significant slowdown in beer consumption, particularly among its Hispanic consumers, following Trump's immigration crackdown. The company's beer business, its largest revenue contributor, reported a 2.6% decline in quarterly depletion volume — the rate at which products are sold — driven by declines in brands such as Modelo Especial and Corona Extra. Its beer depletions rose 6.4% a year ago. Sequential price increases and cost management measures were offset by higher expenses, including increased costs from aluminum tariffs and marketing expenditures. The company's quarterly operating margins at its beer business fell 150 basis points to 39.1%. Constellation reported comparable profit of $3.22 per share for the quarter, below estimates of $3.31. Shares of the company, which maintained its annual enterprise organic sales and profit forecast, were marginally lower in extended trading.
Reuters
01-07-2025
- Business
- Reuters
Corona beer maker Constellation Brands misses quarterly estimates amid tariff woes
July 1 (Reuters) - Constellation Brands (STZ.N), opens new tab missed first-quarter sales and profit estimates on Tuesday, as fears of rising tariffs and economic uncertainty prompted consumers to reduce purchases of beers and wines. U.S. alcoholic beverage makers have faced a double blow from the Trump administration's shifting trade policies, a challenge that comes at a time when the industry is already grappling with tepid demand. Corona beer maker reported net sales of $2.52 billion for the quarter ended May 31, compared with analysts' average estimate of $2.55 billion, according to data compiled by LSEG. Tariffs on beer imports, along with the inclusion of beer cans under aluminum tariffs, have impacted liquor makers such as Constellation Brands and Molson Coors (TAP.N), opens new tab. Last month, U.S. President Trump announced plans to double tariffs on imported steel and aluminum to 50% from 25%, intensifying pressure on global steel producers and escalating the trade war. Meanwhile, Constellation Brands has experienced a significant slowdown in beer consumption, particularly among its Hispanic consumers, following Trump's immigration crackdown. The company's beer business, its largest revenue contributor, reported a 2.6% decline in quarterly depletion volume — the rate at which products are sold — driven by declines in brands such as Modelo Especial and Corona Extra. Its beer depletions rose 6.4% a year ago. Sequential price increases and cost management measures were offset by higher expenses, including increased costs from aluminum tariffs and marketing expenditures. The company's quarterly operating margins at its beer business fell 150 basis points to 39.1%. Constellation reported comparable profit of $3.22 per share for the quarter, below estimates of $3.31. Shares of the company, which maintained its annual enterprise organic sales and profit forecast, were marginally lower in extended trading.
