Constellation Brands (STZ) is faced with concerns over beer growth prospects amid a slowdown in beer consumption, Morgan Stanley said in a note Thursday.
"Beer volume slowdown looks both structural and due to short-term pressure points," the report said. "But already compressed STZ valuation looks reasonable."
The note pointed to pressure factors including health/wellness, less younger age alcohol consumption than in prior generations, cannabis, competition, and a more mature STZ brand portfolio.
Morgan Stanley said it is lowering its already below consensus estimates further for Q4 and FY26/27. It also added that the risk of a beer slowdown is potentially exacerbated by earnings risk from Mexico tariffs.
"With lower estimates, we are cutting our PT to $202 from $220," the report said. Morgan Stanley downgraded the stock to
to equal-weight from overweight.
Price: 172.70, Change: -5.65, Percent Change: -3.17
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