Constellation Brands Stock Falls on Fiscal Q4 Profit Dip

Support at the 100-day moving average could provide a net for today's pullback

Deputy Editor
Apr 8, 2021 at 10:56 AM
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The shares of Constellation Brands, Inc. (NYSE:STZ) are down 5.2% to trade at $222.80 this morning, following the beverage maker's fiscal fourth-quarter earnings report. The company bested analysts estimates, noting strong performance despite challenges related to the pandemic, though it did suffer a year-over-year profit drop. Plus, it posted a disappointing 2021 forecast. Separately, Canopy Growth (CGC) -- a company Constellation Brands owns a 38.6% stake in -- just announced it would buy Supreme Cannabis Company in a cash-and-stock deal worth roughly $256.69 million. 

It's been a choppy climb higher for STZ over the past year, and today's dip puts the stock back below the previously supportive 30-day moving average. Pressure at the $237 mark still looms, too, keeping the shares from rallying back to their Feb. 16 record high of $242.50. Constellation Brands stock is still up 41.2% in the past 12 months, however, and the 100-day moving average -- a trendline that captured the stock's early March pullback -- seems to be providing a net for today's bear gap. 

The options pits have been building up their bearish bets, per STZ's 50-day put/call volume ratio of 1.17 at the International Securities Exchange (ISE), Chicago Board Options Exchange (CBOE), and NASDAQ OMX PHLX (PHLX), which stands higher than 86% of readings from the past year. This means options traders are picking up puts at a quicker clip than usual. 

Analysts, meanwhile, are split on the stock. Eight call STZ a "buy" or better, while six say "hold." The 12-month consensus target price sits a $255.16, which is a 14.5% premium to current levels. 

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