Constellation Brands (STZ:NYS) Fundamental Valuation Report

Fundamental Valuation Report

Constellation Brands(STZ:NYS)

Consumer Defensive:Beverages-Wineries & Distilleries

This Report was generated using the valuation tools available on For a free 30 day trial click here.

Close Price/Date
$203.23 (USD) 10/05/2019

Weighted Valuation
$228.00 (USD)

Overall Rating
Undervalued by 12.2%

Valuation Models Analyst Consensus: $228.00 (USD)
(in order of importance)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Undervalued on a Comparable Valuation
Asset: Undervalued on an Asset Valuation

Company Overview (STZ:NYS USD)

Price 203.23
Range 199.27 – 204.01
52 week 150.94 – 233.02
Open 201.06
Vol / Avg. 1.6M/1.56M
Mkt cap 38.86B
P/E 11.57
Div/yield 2.96/0.01
EPS 17.57
Shares 191.35M
Beta 0.54

Company Description

Constellation Brands Inc produces beer, wine, and spirits and is one of the largest multicategory alcoholic beverage suppliers in the U.S. The firm has the exclusive right to import and market several Mexican beer brands in the U.S., including the Corona, Modelo, and Pacifico brand families, and it acquired Ballast Point, a craft beer brand, in 2015. Constellation Brands’ wine and spirits portfolio includes the Robert Mondavi, Black Box, and Clos du Bois wine brands and Svedka vodka. The firm generates over 90% of its revenue in the U.S.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for STZ:NYS

Using a discounted cash flow model we generated an intrinsic value of $158.94 (USD) for STZ:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

STZ:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $158.94 1% 5% 1% 5%
WACC (or Ke) 5.67 $210.90 $124.44
Terminal Growth Rate 0.70 $127.20 $206.68
Tax Rate 0.17 $173.30 $144.58
Cash Flow 3,516,846,800 $143.95 $173.93
Capital Expenditures -892,400,000 $155.47 $162.41
Long Term Debt 8,029,000,000 $161.04 $156.84

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $553.72 (USD) for STZ:NYS. We also generated a valuation of $181.22 (USD) using other metrics and comparables.
The comparable companies were and Brown-Forman (BF.A:NYS).

Company STZ:NYS End Date Value
Earnings/Share $17.57 (USD)
Book Value/Share $65.59 (USD)
Sales/Share $37.08 (USD)
Cash Flow/Share $10.26 (USD)
EBITDA/Share $22.14 (USD)
Price Based on Comps Adjustment Factor (%)
$563.75 (USD) 3.6
$0.00 (USD) -18.1
$283.12 (USD) 9.6
$351.83 (USD) -17.3
$583.22 (USD) 21.7
STZ:NYS Ratios Used Average Values BF.A:NYS
12.05 PE Ratio 32.09 32.09
3.23 PB Ratio 16.71 16.71
5.71 PS Ratio 7.63 7.63
20.62 PCF Ratio 40.34 40.34
11.14 EV to EBITDA 26.34 26.34


Using a multiples approach we generated a valuation of  $305.44 (USD) for STZ:NYS

Company STZ:NYS End Date Value
Earnings/Share $17.57 (USD)
Book Value/Share $65.59 (USD)
Sales/Share $37.08 (USD)
Cash Flow/Share $10.26 (USD)
EBITDA/Share $22.14 (USD)
Price Based on Comps Adjustment Factor
$463.67 (USD) 0
$286.46 (USD) 0
$174.45 (USD) 0
$222.46 (USD) 0
$380.18 (USD) 0
Ratios Ratio Average
PE Ratio 26.39
PB Ratio 4.37
PS Ratio 4.70
PCF Ratio 21.67
EV to EBITDA 17.17

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  STZ:NYS for the last 10 years was  4.33

We ran the Adjusted Book Value for  STZ:NYS and generated a book value of  $65.62 (USD)
By multiplying these we get an adjusted valuation of  $283.86 (USD)

Analyst Data

In the Stockcalc database there are 5 analysts that provide a valuation for STZ:NYS. The 5 analysts have a concensus valuation for STZ:NYS for 2020 of $228.00 (USD).

STZ:NYS Constellation Brands

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
5 2 0 4.4286 Outperform 2019-5-9

Current Price: 203.23 USD

Analyst Consensus
USD Millions 2020 2021 2022
Mean EPS 9.09 9.98 11.15
# EPS Analysts 7 7 2
Mean Revenue 7,934.90 8,294.50 8,728.60
# Revenue Analysts 6 6 3
Mean Target Price 228.00
Mean Cash Flow 12.04 13.05 15.35
Mean EBITDA 2,964.30 3,265.80 3,492.40
Mean Net Income 1,793.60 1,997.90 2,080.60
Mean Debt Outstanding 12,078.30 11,365.10 9,997.70
Mean Tax Rate 17.00 17.00
Mean Growth Rate 9.32
Mean Capital Expenditure 873.00 722.90 538.00

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.
The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).
The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.
With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.
If we have Analyst coverage for the company we use the consensus target price here.

Notice to User

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