Constellation Earnings: Strong Profit on Beer Volume Expansion, but Wine and Spirits Still Weak  

We don’t plan any material changes to our $275 fair value estimate after absorbing wide-moat Constellation Brands’ fiscal 2024 results and fiscal 2025 outlook that align with our forecast. Revenue grew 5% as the strength of its premium beer portfolio (over 80% of total sales) more than offset persistent weakness in wine and spirits, while adjusted EPS was up 13% on expense leverage, cost reduction, and lower interest expenses. We are maintaining our fiscal 2025 projections for 6.4% sales growth and $13.70 adjusted EPS, which align with the firm’s outlook for 6%-7% sales growth and adjusted EPS of $13.50 to $13.80. Our 10-year forecasts for a 6% sales compound annual growth rate and 33% average operating margin remain in place.