J.P. Morgan Securities and Wells Fargo cut their price targets today
Constellation Brands Inc (NYSE:STZ) will be among the first to release earnings results in 2025, with its fourth-quarter report due out before the open on Friday, Jan. 9. The beer, wine, and spirits maker is drawing negative analyst attention ahead of the event, with J.P. Morgan Securities and Wells Fargo slashing their price targets to $262 and $275 from $293 and $295, respectively.
STZ is down 1.1% to trade at $220.42 at last glance, looking to extend its 11.5% year-over-year deficit. Shares are fresh off a Jan 3., 52-week low of $217.52, and yesterday failed to conquer their 20-day moving average, after gapping below this trendline in mid-December.
The security has a less than stellar post-earnings track record, finishing five of the past eight next-day sessions lower -- including back-to-back losses of 4.7% and 3.3% after its October and July reports. Constellation Brands stock averaged a move of 3.3% over the past two years, regardless of direction, and this time around the options pits are pricing in a slightly larger swing of 4.3%.
Options traders lean overwhelmingly bullish, per the equity's 50-day call/put volume ratio of 4.59 at the International Securities Exchange (ISE), Cboe Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX) that ranks higher than 94% of readings from the past year.
That optimism is echoed in the options pits, where 16 of the 21 firms in question carry a "buy" or better rating. Additionally , the 12-month consensus target price of $287.18 is a 30.4% premium to current levels. Should earnings disappoint, both options traders and analysts could change their bullish tune and pressure STZ lower.