BMO Maintains Bullish Constellation Brands Call Despite Stock Slump
Constellation Brands closed at $118.39 on Oct. 7, down 29% from its February high, while BMO reiterated an Outperform rating and a $190 target, 60% above that close. Beer depletions fell 0.6% in the quarter to Aug. 31 as Corona Extra and Modelo Especial lost volume, and management expects flat net sales this fiscal year. Analysts expect $11.80 per share for the year to February 2027, with the stock trading at 9.9x forward earnings versus a five-year average of 17.2x.
BMO analyst Andrew Strelzik kept an Outperform rating and a $190 target on Oct. 8, one day after the shares closed at $118.39. That close was 29% under February's peak. RBC's Nik Modi also stayed positive on Oct. 8, with a $182 target.
In the quarter ending Aug. 31, beer net sales increased 5%, yet distributor depletions slipped 0.6%. Corona Extra fell roughly 5% and Modelo Especial about 2%. Management guides to roughly flat net sales and comparable EPS of $11.20-$11.90 for the year to February 2027. The shares trade at 9.9x forward earnings, versus a five-year average of 17.2x.
A sustained slump in Constellation Brands could affect shareholders, including funds and retirement accounts, through weaker returns and buyback timing. Distributors and retailers may adjust orders if depletions stay soft, while employees and suppliers around beer production could face pressure from flat sales and rising costs. Consumers might see changed promotions or pricing if volume declines continue. BMO's bullish target may reassure some investors, but it does not remove uncertainty around brand demand or the company's outlook.