Constellation Earnings: Modelo Led Strong Premium Beer Growth, but Wine and Spirits Remain a Drag 

We plan to maintain our $274 fair value estimate after absorbing Constellation Brands’ solid fiscal second-quarter results, with sales up 7% and adjusted EPS growth (excluding Canopy investments) of 14%, ahead of our projections of 6.5% and 11%, respectively. We are tweaking our 2024 projections to align with the firm’s improved earnings outlook but maintain our 10-year forecasts for mid-single-digit top-line growth and average operating margins in the mid-30s in place. Shares look undervalued, trading at a 12% discount, and we suggest that investors consider buying this wide-moat brewer.