Constellation Brands, Inc. STZ is scheduled to release fourth-quarter fiscal 2025 results on April 9, 2025. The alcoholic beverage bigwig is expected to have recorded top and bottom-line growth in the to-be-reported quarter.

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The Zacks Consensus Estimate for the company’s fiscal fourth-quarter earnings is pegged at $2.29 per share, indicating 1.3% growth from the year-ago quarter’s actual. The consensus mark has moved down 0.9% in the past seven days. The consensus estimate for revenues is pegged at $2.1 billion, indicating a 0.1% increase from the prior-year quarter’s reported figure.

The Zacks Consensus Estimate for the company’s fiscal 2025 earnings is pegged at $13.44 per share, indicating 11.4% growth from the year-ago quarter’s actual. The consensus mark has moved down a penny in the past seven days. The consensus mark for revenues is pegged at $10.2 billion, indicating a 0.1% increase from the prior-year quarter’s reported figure.

In the last reported quarter, the alcohol behemoth delivered a negative earnings surprise of 2.7%. Its bottom line beat estimates by 2.3%, on average, in the trailing four quarters.

What Zacks Model Says for the STZ Stock

Our proven model does not conclusively predict an earnings beat for Constellation Brands this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. But that is not the case here. You can uncover the best stocks before they are reported with our Earnings ESP Filter.

Constellation Brands has an Earnings ESP of +0.12% and a Zacks Rank #4 (Sell).

Key Factors to Note Before STZ’s Q4 Results

Constellation Brands continues to grapple with significant challenges in its wine and spirits segment. STZ’s wine and spirits segment has struggled with persistent headwinds related to shifting consumer preferences, competitive pressures and operational inefficiencies, weighing on overall performance. The company has been witnessing soft consumer demand and continued retailer inventory destocking in most price segments in the U.S. wholesale market. Further, consumer demand remains weak in the wine category, mainly in the lower-price segments.

On the last reported quarter’s earnings call, management expects sales for the wine and spirits segment to decline 5-8% year over year for fiscal 2025, with a 17-19% drop in operating income.

Constellation Brands witnessed higher packaging and raw material costs from continued inflationary pressures. Also, increased depreciation and operating costs from brewery capacity expansions act as deterrents.

The company has been witnessing a challenging operating backdrop, including the ongoing consumer dynamics. The subdued overall spend and prolonged value-seeking behavior in consumers might affect the company’s demand. Also, the macro shifts, mainly any change from potential tariff policies, might act as deterrents. These trends and the expected tariffs are expected to have impacted the company’s margins in the to-be-reported quarter.

Consequently, on the last reported quarter’s earnings call, the company lowered its earnings per share (EPS) outlook for fiscal 2025. The company now envisions comparable EPS of $13.40-$13.80 for fiscal 2025 compared with the earlier estimate of $13.60-$13.80. STZ anticipates enterprise operating income on a reported basis to decline 62-65% for fiscal 2025. Corporate expenses and net interest expenses are expected to be $250 million and $410 million, respectively, for fiscal 2025.

However, the company’s beer segment remains resilient, with minimal impact from broader economic conditions. Constellation Brands’ beer division is expected to have benefited from cost-saving measures and efficiency initiatives, though increased marketing investments are likely to have slightly offset these gains. This is expected to have been reflected in the beer segment’s operating income for the to-be-reported quarter.

The company is poised for continued growth in its beer portfolio, driven by brands like Modelo Especial, Corona Extra, Pacifico and Modelo Chelada. The beer segment’s premiumization strategy, including flavored beers and seltzers, is expected to have boosted the top line in the fiscal fourth quarter.

On the last reported quarter’s earnings call, management anticipates enterprise net sales to increase 2-5% and the comparable operating income to improve 6-9% for fiscal 2025. It projects 4-7% sales growth, inclusive of 1-2% pricing for the beer segment. The company expects operating income to improve 9-12% and an operating margin of nearly 39% for the beer segment.

STZ Stock’s Valuation Picture

From a valuation perspective, Constellation Brands offers an attractive opportunity, trading at a discount relative to historical and industry benchmarks. With a forward 12-month price-to-earnings ratio of 12.92X, which is below the five-year high of 23.57X and the Beverages - Alcohol industry’s average of 15.29X, the stock offers compelling value for investors seeking exposure to the alcohol beverages space.

The recent market movements show that STZ shares have lost 30.9% in the past year compared with the industry's 15.9% decline.

STZ Stock One-Year Price Performance

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Stocks With the Favorable Combination

Here are some companies, which according to our model, have the right combination of elements to post an earnings beat this time around:

Anheuser-Busch InBev BUD, alias AB InBev, currently has an Earnings ESP of +0.97% and a Zacks Rank of 3. The company is expected to report top-line growth when it reports first-quarter 2025 results. The Zacks Consensus Estimate for BUD’s quarterly earnings has moved down 2.5% in the past 30 days to 77 cents per share. The consensus mark indicates a 2.7% growth from the year-ago quarter’s number. You can see the complete list of today’s Zacks #1 Rank stocks here.

The Zacks Consensus Estimate for BUD’s quarterly revenues is pegged at $14 billion, which implies a decline of 3.8% from the figure reported in the prior-year quarter. BUD delivered an earnings surprise of 11.7%, on average, in the trailing four quarters.

Monster Beverage MNST presently has an Earnings ESP of +0.54% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports first-quarter 2025 results. The Zacks Consensus Estimate for quarterly revenues is pegged at $1.97 billion, which indicates a rise of 3.7% from the figure reported in the prior-year quarter.

The Zacks Consensus Estimate for quarterly earnings has been unchanged at 46 cents per share in the past 30 days. The consensus mark for MNST’s earnings indicates growth of 9.5% from the year-ago quarter’s number. MNST delivered a negative earnings surprise of 5.8%, on average, in the trailing four quarters.

Tyson Foods TSN currently has an Earnings ESP of +2.35% and a Zacks Rank of 3. The company is expected to register top and bottom-line growth when it reports first-quarter 2025 results. The Zacks Consensus Estimate for TSN’s quarterly earnings has moved down 3.4% in the past 30 days to 85 cents per share. The consensus estimate for earnings indicates 37.1% growth from the year-ago quarter's number.

The Zacks Consensus Estimate for Tyson Foods’ quarterly revenues is pegged at $13.1 billion, implying a rise of 0.2% from the figure reported in the prior-year quarter. TSN delivered an earnings surprise of 52%, on average, in the trailing four quarters.

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