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Can Constellation Brands (STZ) Retain Earnings Trend in Q3?
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Constellation Brands Inc. (STZ - Free Report) is scheduled to report third-quarter fiscal 2018 results on Jan 5. Last quarter, the company delivered a positive earnings surprise of 14.4%.
In fact, its earnings have outperformed the Zacks Consensus Estimate by an average of 13.6% in the trailing four quarters. Let’s see how things are shaping up for this announcement.
The question lingering in investors’ minds now is whether Constellation Brands will be able to post positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the fiscal third quarter has declined in the last 30 days. The current estimate of $1.87 per share for the to-be-reported quarter reflects year-over-year decline of nearly 4.7%. Further, analysts polled by Zacks expect revenues of $1.86 billion, which is 2.9% higher than the year-ago quarter.
We note that the stock has outperformed the industry in the last three months. The company’s shares have surged 14.3%, while the industry grew 3%.
Factors at Play
Constellation Brands has been on a roll owing to strong brand portfolio, strategic initiatives and robust quarterly results. The company’s focus on brand building, strength in beer business and efforts to include new products in its wine and spirits portfolio are the key catalysts. Further, it has been gaining from effective integration and growth of recently acquired brands, higher margins, solid overall depletion trends and strong consumer demand.
In fact, these factors assisted the company to showcase another sterling performance in first-quarter fiscal 2018, marking its 16th straight quarter of earnings growth year-over-year and 11th straight positive surprise. Moreover, sales advanced while favorable pricing, volumes and lower cost of goods sold provided a boost to margins.
Further, the company continues to gain from the recent buyouts and strength in the beer business, which encouraged management to raise fiscal 2018 earnings view. Management also hiked fiscal 2018 operating income targets for the beer segment. The company now envisions adjusted earnings guidance in a range of $7.90-$8.10 per share. Operating income is now anticipated to grow 13-15% for the beer segment.
The company is also on track with its Nava brewery expansion, while it also enhanced wine portfolio with the buyout of Schrader Cellars. These factors make us optimistic about the company’s upcoming results.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Constellation Brands is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Constellation Brands has an Earnings ESP of -0.07%. While the company’s Zacks Rank #2 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise.
Stocks Poised to Beat Earnings Estimates
Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Fastenal Company (FAST - Free Report) currently has an Earnings ESP of +0.55% and a Zacks Rank #2.
McDonald's Corporation (MCD - Free Report) has an Earnings ESP of +0.32% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Image: Bigstock
Can Constellation Brands (STZ) Retain Earnings Trend in Q3?
Constellation Brands Inc. (STZ - Free Report) is scheduled to report third-quarter fiscal 2018 results on Jan 5. Last quarter, the company delivered a positive earnings surprise of 14.4%.
In fact, its earnings have outperformed the Zacks Consensus Estimate by an average of 13.6% in the trailing four quarters. Let’s see how things are shaping up for this announcement.
Constellation Brands Inc Price and EPS Surprise
Constellation Brands Inc Price and EPS Surprise | Constellation Brands Inc Quote
What to Expect?
The question lingering in investors’ minds now is whether Constellation Brands will be able to post positive earnings surprise in the quarter to be reported. The Zacks Consensus Estimate for the fiscal third quarter has declined in the last 30 days. The current estimate of $1.87 per share for the to-be-reported quarter reflects year-over-year decline of nearly 4.7%. Further, analysts polled by Zacks expect revenues of $1.86 billion, which is 2.9% higher than the year-ago quarter.
We note that the stock has outperformed the industry in the last three months. The company’s shares have surged 14.3%, while the industry grew 3%.
Factors at Play
Constellation Brands has been on a roll owing to strong brand portfolio, strategic initiatives and robust quarterly results. The company’s focus on brand building, strength in beer business and efforts to include new products in its wine and spirits portfolio are the key catalysts. Further, it has been gaining from effective integration and growth of recently acquired brands, higher margins, solid overall depletion trends and strong consumer demand.
In fact, these factors assisted the company to showcase another sterling performance in first-quarter fiscal 2018, marking its 16th straight quarter of earnings growth year-over-year and 11th straight positive surprise. Moreover, sales advanced while favorable pricing, volumes and lower cost of goods sold provided a boost to margins.
Further, the company continues to gain from the recent buyouts and strength in the beer business, which encouraged management to raise fiscal 2018 earnings view. Management also hiked fiscal 2018 operating income targets for the beer segment. The company now envisions adjusted earnings guidance in a range of $7.90-$8.10 per share. Operating income is now anticipated to grow 13-15% for the beer segment.
The company is also on track with its Nava brewery expansion, while it also enhanced wine portfolio with the buyout of Schrader Cellars. These factors make us optimistic about the company’s upcoming results.
What the Zacks Model Unveils?
Our proven model does not conclusively show that Constellation Brands is likely to beat estimates this quarter. This is because a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
Constellation Brands has an Earnings ESP of -0.07%. While the company’s Zacks Rank #2 increases the predictive power of ESP, we need to have a positive ESP to be confident about an earnings surprise.
Stocks Poised to Beat Earnings Estimates
Here are some other companies you may want to consider as our model shows that these too have the right combination of elements to post an earnings beat:
Walgreens Boots Alliance Inc. (WBA - Free Report) currently has an Earnings ESP of +3.97% and a Zacks Rank #2. You can see the complete list of today’s Zacks #1 Rank stocks here.
Fastenal Company (FAST - Free Report) currently has an Earnings ESP of +0.55% and a Zacks Rank #2.
McDonald's Corporation (MCD - Free Report) has an Earnings ESP of +0.32% and a Zacks Rank #3.
More Stock News: This Is Bigger than the iPhone!
It could become the mother of all technological revolutions. Apple sold a mere 1 billion iPhones in 10 years but a new breakthrough is expected to generate more than 27 billion devices in just 3 years, creating a $1.7 trillion market.
Zacks has just released a Special Report that spotlights this fast-emerging phenomenon and 6 tickers for taking advantage of it. If you don't buy now, you may kick yourself in 2020.
Click here for the 6 trades >>