Constellation Brands Inc., whose Modelo Especial has overtaken Anheuser-Busch InBev’s Bud Light to become the best-selling beer in the U.S., will report fiscal first-quarter earnings on Friday, and beer is expected to be top of mind for investors.
JPMorgan analysts raised their revenue estimates for Constellation’s STZ beers by 100 basis points to 7.5%, they wrote in a recent note, and think consensus beer depletion estimates of up 4.3% “appear conservative in light of solid tracked channel data and constructive commentary from CEO [Bill] Newlands.”
The valuation is also still attractive, with shares trading at 18 times calendar 2024 price/earnings, excluding the Canopy Growth Corp. investment, compared with Molson Coors Beverage Co. TAP , which is trading at 15 times “despite more durably strong fundamental outlook ,” they wrote. “Bud Light retains the title — but Modelo Especial is making a run for the title for calendar 2023,” Bump Williams, the consulting company’s president and chief executive, told MarketWatch in an email.