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Constellation Brands Looks Bullish: Will the Rally Continue?
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Constellation Brands Inc. (STZ - Free Report) is witnessing spectacular growth lately, driven by its constant brand-building efforts, acquisitions and strength in the beer business. Further, its solid surprise trend and favorable outlook for fiscal 2019 has boosted investors’ confidence on the stock.
This led to an upsurge in the stock price, which also hovers close to its 52-week high. The stock has rallied 22.3% in the past year, outperforming 0.4% growth recorded by the industry. Additionally, this Victor, NY-based company has gained 1.7% since Mar 29, following robust fourth-quarter fiscal 2018 results and strong view for fiscal 2018.
Notably, the company’s fourth-quarter fiscal 2018 earnings marked the 14th straight earnings beat and the 19th consecutive quarter of year-over-year improvement. During the reported quarter, Constellation Brands gained from efforts to drive consumer demand for its robust brand portfolio. Moreover, the top-line beat was driven by strong depletions in both beer, and wine & spirits business. Management remains encouraged with the superb results, which was marked by significant market share gains, margin expansion, strong free cash flow and solid execution. Consequently, the company provided an upbeat outlook for fiscal 2019.
Constellation Brands’ consistent focus on brand building and its initiatives to include new products are the key revenue drivers for the stock. Owing to its strategic endeavors, the company is witnessing increasing market share, especially in the U.S. beer category. Notably, the company was the highest growth contributor in the U.S. beer market as all import brand families achieved record volumes. Also, the company is focused on expanding in the craft beer space, which has solid growth opportunity. In this regard, management expects solid results from its Ballast Point craft beer brand, which is currently placed among the top 20 craft brands nationwide.
Moreover, the company is bringing innovations and improving its operational activities. Also, it is focused on enhancing points of distribution at retail and effectively executing its merchandising initiatives to boost sales.
Further, Constellation Brands has been significantly gaining from strength in beer business over the years. In fourth-quarter fiscal 2018, sales at the beer business improved 11.9%, driven by 10.2% rise in shipment volumes and depletions growth of 11%. The solid portfolio depletions mainly stemmed from strength in Modelo and Corona brand families, with rise in depletions of 18% and 16%, respectively.
During the quarter, the company gained from the launch of Corona Familiar new packages in regionally-expanded markets, which positioned it among the top 10 high-end beer share gainers alongside Modelo Especial, Modelo Chelada Tamarindo Picante and Pacifico. Operating income for the beer segment gained from solid operating performance and favorable pricing. The management expects net sales and operating income for the beer segment to increase 9-11% in the future.
The above-mentioned factors clearly profess that Constellation Brands still has significant growth potential in the days ahead. This is also evident from this Zacks Rank #3 (Hold) stock’s Growth Score of B and long-term earnings growth rate of 18.4%.
Do Beverages-Alcohol Stocks Grab Your Attention? Check These
Investors interested may consider Kirin Holdings Co. (KNBWY - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and The Boston Beer Company Inc. (SAM - Free Report) carrying a Zacks Rank #2 (Buy). Another stock worth considering in the broader Consumer Staples sector is Inter Parfums Inc. (IPAR - Free Report) with a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kirin Holdings has jumped nearly 5.8% in the last three months. Further, the company has long-term earnings growth rate of 10%.
Boston Beer has gained nearly 46.2% in the last three months. Moreover, it has long-term earnings growth rate of 9.5%.
Inter Parfums has improved 14.8% in the last three months and has long-term earnings growth rate of 12.3%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
Image: Bigstock
Constellation Brands Looks Bullish: Will the Rally Continue?
Constellation Brands Inc. (STZ - Free Report) is witnessing spectacular growth lately, driven by its constant brand-building efforts, acquisitions and strength in the beer business. Further, its solid surprise trend and favorable outlook for fiscal 2019 has boosted investors’ confidence on the stock.
This led to an upsurge in the stock price, which also hovers close to its 52-week high. The stock has rallied 22.3% in the past year, outperforming 0.4% growth recorded by the industry. Additionally, this Victor, NY-based company has gained 1.7% since Mar 29, following robust fourth-quarter fiscal 2018 results and strong view for fiscal 2018.
Notably, the company’s fourth-quarter fiscal 2018 earnings marked the 14th straight earnings beat and the 19th consecutive quarter of year-over-year improvement. During the reported quarter, Constellation Brands gained from efforts to drive consumer demand for its robust brand portfolio. Moreover, the top-line beat was driven by strong depletions in both beer, and wine & spirits business. Management remains encouraged with the superb results, which was marked by significant market share gains, margin expansion, strong free cash flow and solid execution. Consequently, the company provided an upbeat outlook for fiscal 2019.
Strategies Supporting Constellation Brands’ Growth
Constellation Brands’ consistent focus on brand building and its initiatives to include new products are the key revenue drivers for the stock. Owing to its strategic endeavors, the company is witnessing increasing market share, especially in the U.S. beer category. Notably, the company was the highest growth contributor in the U.S. beer market as all import brand families achieved record volumes. Also, the company is focused on expanding in the craft beer space, which has solid growth opportunity. In this regard, management expects solid results from its Ballast Point craft beer brand, which is currently placed among the top 20 craft brands nationwide.
Moreover, the company is bringing innovations and improving its operational activities. Also, it is focused on enhancing points of distribution at retail and effectively executing its merchandising initiatives to boost sales.
Further, Constellation Brands has been significantly gaining from strength in beer business over the years. In fourth-quarter fiscal 2018, sales at the beer business improved 11.9%, driven by 10.2% rise in shipment volumes and depletions growth of 11%. The solid portfolio depletions mainly stemmed from strength in Modelo and Corona brand families, with rise in depletions of 18% and 16%, respectively.
During the quarter, the company gained from the launch of Corona Familiar new packages in regionally-expanded markets, which positioned it among the top 10 high-end beer share gainers alongside Modelo Especial, Modelo Chelada Tamarindo Picante and Pacifico. Operating income for the beer segment gained from solid operating performance and favorable pricing. The management expects net sales and operating income for the beer segment to increase 9-11% in the future.
The above-mentioned factors clearly profess that Constellation Brands still has significant growth potential in the days ahead. This is also evident from this Zacks Rank #3 (Hold) stock’s Growth Score of B and long-term earnings growth rate of 18.4%.
Do Beverages-Alcohol Stocks Grab Your Attention? Check These
Investors interested may consider Kirin Holdings Co. (KNBWY - Free Report) , sporting a Zacks Rank #1 (Strong Buy), and The Boston Beer Company Inc. (SAM - Free Report) carrying a Zacks Rank #2 (Buy). Another stock worth considering in the broader Consumer Staples sector is Inter Parfums Inc. (IPAR - Free Report) with a Zacks Rank #1. You can see the complete list of today’s Zacks #1 Rank stocks here.
Kirin Holdings has jumped nearly 5.8% in the last three months. Further, the company has long-term earnings growth rate of 10%.
Boston Beer has gained nearly 46.2% in the last three months. Moreover, it has long-term earnings growth rate of 9.5%.
Inter Parfums has improved 14.8% in the last three months and has long-term earnings growth rate of 12.3%.
Will You Make a Fortune on the Shift to Electric Cars?
Here's another stock idea to consider. Much like petroleum 150 years ago, lithium power may soon shake the world, creating millionaires and reshaping geo-politics. Soon electric vehicles (EVs) may be cheaper than gas guzzlers. Some are already reaching 265 miles on a single charge.
With battery prices plummeting and charging stations set to multiply, one company stands out as the #1 stock to buy according to Zacks research.
It's not the one you think.
See This Ticker Free >>