Constellation Brands Stock Seeing Stars on Earnings Beat

The company raised its fiscal 2020 guidance, too

Deputy Editor
Jun 28, 2019 at 10:07 AM
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The shares of Constellation Brands Inc (NYSE:STZ) are headed for their fourth day in the black, after the adult beverage concern announced fiscal first-quarter earnings and revenue that beat analysts' expectations. The company said sales of its Modelo and Corona Premier brands were major drivers, and lifted its fiscal 2020 profit forecast as well. The stock is up 5.5% at $198.55, trading in a region it hasn't touched in weeks. 

What's more, the equity is set to topple both its 20-day and 30-day moving averages for the first time since early April. STZ gapped lower in late May, after President Donald Trump threatened Mexico with tariffs, touching a two-month low of $171.36. Since then, the security has rallied nearly 16%.

While analysts have been quiet about the stock so far this morning, a round of upgrades could put even more wind at STZ's back. Right now, seven analysts consider the security a "buy," while eight call it a "hold." The consensus 12-month price target of $221.18 represents a slim premium to current levels, suggesting price-target hikes could ensue. 

Options bears were circling the stock ahead of earnings, with STZ sporting a 10-day put/call volume ratio of 0.83 on the the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX). While this ratio indicates calls bought to open exceeded puts on an absolute basis, the ratio sits in the 85th percentile of its annual range, pointing to a healthier-than-usual appetite for bearish bets of late.


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