What You Must Know Before Buying Constellation Brands Stock

A number of bear gaps have knocked STZ off its record high

facebook twitter linkedin


Constellation Brands, Inc. (NYSE:STZ) is up 0.4% to trade at t $226.64 at last check. Earlier this month, the beer, wine, and spirits name, which is the parent of brands such as Corona, Modelo, and SVEDKA Vodka, announced a C-suite shakeup. The company promoted Kris Carey to Executive Vice President and Chief Human Resources Officer, effective in May 2022.

On the charts, a number of bear gaps have knocked Constellation Brands stock off a Jan. 6, all-time high of $257.99. Plus, the 50-day moving average turned down several of the stock's rally attempts in February, and is still capping the equity's recent bounce off the $257 level. Year-to-date, STZ is down 9.7% 

STZ 50 Day

The brokerage bunch leans bullish towards the security. Of the 12 analysts in question, nine call STZ a "strong buy," while the 12-month consensus target price of $272.52 is a 20.2% premium to current levels.

At the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), STZ's 10-day put/call volume ratio of 1.55 ranks higher than 83% of readings from the last year. This suggests puts have been picked up at a much quicker-than-usual clip over the past two weeks.

From a fundamental point of view, Constellation Brands stock offers little consistency or security, as well as an incredibly slow growth rate and an inflated valuation. STZ trades at a forward price-earnings of 17.54, which does not mean much considering its history.

In fact, Constellation Brands posted $11.8 million in net losses for 2020, which is roughly a $3.44 billion decrease compared to 2019. In addition, the company generated $52.9 million in net losses in the trailing 12-month period, or a $2.05 billion decrease in net income compared to 2021.

Constellation Brands stock has a rich price-sales ratio of 4.71 as well, which is only made worse by the fact the company has only grown annual revenues 7% since 2019. In addition, STZ's balance sheet is abysmal, with $361 million in cash and $10.9 billion in total debt.

Overall, the only positive is that analysts expect the alcohol concern to grow earnings by 15.8% and revenues by 7.2%. Still, the company will have to improve significantly before STZ can be considered a viable investment.

 

Stop leaving money on the table with the same old broken options trading approach...

There is no options strategy that more perfectly capitalizes during earnings season better than this simple call and put buying strategy. Perfect for aggressive traders looking to recover their suffering portfolios so far in 2022. With the simplest possible options strategy, Schaeffer's team with 100+ years of options trading excellence, target 200% gains on every single trade. So many trades are being beaten down by the market, but don't be one of them! Don't waste another second... join us right now before the next trade is released! 

 
Schaeffer's Daily Bulletin Offer
 


 


 
Special Offers from Schaeffer's Trading Partners