Where Will Constellation Brands Stock Be in 3 Years?

• Constellation’s maturation stalled retired implicit the past 3 years.

• It’s trying to refresh its brew concern and right-size its vino and spirits segments.

• The banal looks cheap, but it won’t bid a higher valuation anytime soon.

• 10 stocks we similar amended than Constellation Brands ›

Constellation Brands (NYSE: STZ), 1 of the world's largest producers of beers, wines, and spirits, was considered a unchangeable bluish spot stock. But implicit the past 3 years, Constellation's banal declined much than 40% arsenic the S&P 500 rallied implicit 70%.

Constellation mislaid its luster arsenic its maturation stalled out, it grappled with rising tariffs, and it racked up steep losses. But tin it flooded those challenges implicit the adjacent 3 years?

Constellation sells implicit 100 brands of alcoholic beverages. In fiscal 2025 (which ended this February), it generated 84% of its gross from its beers (including Modelo, Corona, and Pacifico), 14% from its wines (including Kim Crawford, Ruffino 1887, and The Prisoner), and 4% from its spirits (including Casa Noble Tequila, Svedka Vodka, and High West Whiskey). Here's however those 3 halfway businesses fared implicit the past 3 fiscal years.

Data source: Constellation Brands.

Constellation's brew concern cooled disconnected successful fiscal 2024 and fiscal 2025 arsenic it faced respective large challenges. Younger consumers successful the U.S., wherever it generates astir of its revenue, drank little intoxicant than erstwhile generations. At the aforesaid time, galore of its Hispanic consumers -- who accounted for astir fractional of its brew income -- reined successful their spending arsenic they dealt with migration issues and different macro headwinds nether the Trump Administration.

Rising tariffs connected aluminum cans (which accounted for astir 40% of its brew shipments from Mexico), proviso concatenation constraints successful Mexico (due to the Mexican government's cancellation of a planned brewery successful 2020), and ostentation besides forced it to rise its prices. Those terms hikes exacerbated its slowdown, adjacent arsenic it launched caller types of alcoholic beverages (like hard seltzer) and alcohol-free drinks to trim its dependence connected accepted beers.

Its smaller vino and spirits segments besides struggled arsenic consumers not lone drank little but shunned cheaper brands. To support gait with that shift, it sold a batch of its lower-end vino and tone brands to absorption connected its higher-end brands. But by right-sizing those 2 segments, it reduced their revenues and accrued the value of its struggling brew business.