STZ

[Landonfisher]

Constellation Brands is the third largest beer seller in the United Staes. In some ways, it's faring much better than established giants such as Anheuser Busch InBev and Molson Coors.

For the upcoming earnings, analysts will be focused on growth. In the past year, Constellation Brands grew 10% in the beer segment and 3% in the wine and spirits division.

Under the trade wars, what do you think STZ will perform in the future?

 

[DaveV]

Another important segment is the marijuana industry. STZ paid $100 millions to buy 10% of a marijuana company, and that stake is now worth $600 million.

 

[vanzandt]

Constellation Brands is the third largest beer seller in the United Staes. In some ways, it's faring much better than established giants such as Anheuser Busch InBev and Molson Coors.

For the upcoming earnings, analysts will be focused on growth. In the past year, Constellation Brands grew 10% in the beer segment and 3% in the wine and spirits division.

Under the trade wars, what do you think STZ will perform in the future?

There's a presidential election on 7/1. The favorite is allegedly a major lefty. I assume this will not bode well for the Peso. Perhaps already reflected in the recent weakness below.

A weak Peso is great for STZ. They can expand their margin and/or lower shelf prices in the States to gain market-share.

That being said, NAFTA renegotiation's are gonna be tricky for this. Its a grain thing. And subsidies to U.S. farmers for those grains. Its pretty complicated.

Its gonna have to get through $235 with some conviction to continue up. Earnings are Friday. Expect good numbers... but I think with the uncertainty of NAFTA for now, along with a new President that is not exactly a fan of Trump.... these things combined might tend to put the brakes on any strong up move for now.

Looks like an ascending wedge though. The $230 straddle is pricing about an 4.5% move.

 

[Landonfisher]

If because of tariff, STZ lost its global (ex-US) market-share, only gained domestic market-share, that would be pretty bad for STZ in the future.

 

[vanzandt]

If because of tariff, STZ lost its global (ex-US) market-share, only gained domestic market-share, that would be pretty bad for STZ in the future.

Looks like they beat on top and missed on the bottom.
They're down $9.60 to $222 pre-market here.
Operating margins took a 230 BP hit. Blamed higher transport costs, marketing, and a stronger dollar.
Guidance going forward is below estimates.

Important takeaway... "higher transportation costs" is going to be a resonating theme going forward this earnings season. VMC and MLM are gonna get clobbered. They are both down significantly from when I wrote that a few weeks back but there's still some juice there on any strength.