Last week saw the newest full-year earnings release from Constellation Brands, Inc. (NYSE:STZ), an important milestone in the company's journey to build a stronger business. Constellation Brands reported in line with analyst predictions, delivering revenues of US$10.0b and statutory earnings per share of US$9.39, suggesting the business is executing well and in line with its plan. This is an important time for investors, as they can track a company's performance in its report, look at what experts are forecasting for next year, and see if there has been any change to expectations for the business. We thought readers would find it interesting to see the analysts latest (statutory) post-earnings forecasts for next year.
Taking into account the latest results, the most recent consensus for Constellation Brands from 20 analysts is for revenues of US$10.6b in 2025. If met, it would imply a modest 6.7% increase on its revenue over the past 12 months. Statutory earnings per share are predicted to jump 41% to US$13.35. Before this earnings report, the analysts had been forecasting revenues of US$10.6b and earnings per share (EPS) of US$13.23 in 2025. The consensus analysts don't seem to have seen anything in these results that would have changed their view on the business, given there's been no major change to their estimates.
The analysts reconfirmed their price target of US$298, showing that the business is executing well and in line with expectations. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. Currently, the most bullish analyst values Constellation Brands at US$325 per share, while the most bearish prices it at US$261. The narrow spread of estimates could suggest that the business' future is relatively easy to value, or thatthe analysts have a strong view on its prospects.
Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. It's clear from the latest estimates that Constellation Brands' rate of growth is expected to accelerate meaningfully, with the forecast 6.7% annualised revenue growth to the end of 2025 noticeably faster than its historical growth of 4.5% p.a. over the past five years. Compare this with other companies in the same industry, which are forecast to grow their revenue 5.0% annually. It seems obvious that, while the growth outlook is brighter than the recent past, the analysts also expect Constellation Brands to grow faster than the wider industry.
The Bottom Line
The most important thing to take away is that there's been no major change in sentiment, with the analysts reconfirming that the business is performing in line with their previous earnings per share estimates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. The consensus price target held steady at US$298, with the latest estimates not enough to have an impact on their price targets.
Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have forecasts for Constellation Brands going out to 2027, and you can see them free on our platform here.
Before you take the next step you should know about the 1 warning sign for Constellation Brands that we have uncovered.
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