Pivotal Research Thinks Constellation Brands Inc’s Stock is Going to Recover

By Carrie Williams

Pivotal Research analyst Timothy Ramey maintained a Buy rating on Constellation Brands Inc (STZResearch Report) today and set a price target of $265. The company’s shares opened today at $152.61, close to its 52-week low of $152.51.

Ramey wrote:

“We are convinced that CGC is the best way to play the rapidly growing cannabis market and investors should begin to fully reflect that value and CGC’s prospects, rather than penalizing STZ for the cash carrying costs of the investment, in our view. This makes STZ a truly compelling BUY. VALUATION: Constellation trades at 15.8x our estimate of EV/EBITDA, no doubt as “cheap” as STZ has been in the past five years. If one takes the POV that CGC could double to a $20 billion market cap in 18-24 months (our personal view) then Constellation will have a $10 billion investment as an add-back to EV and thus on the basis of core EBITDA of around $3,000, could trade at 20x that or over $300 based on FY20 EBITDA and the equity value of CGC. We’ve haircut that today but still view it as a more likely than not scenario.”

According to TipRanks.com, Ramey is a 5-star analyst with an average return of 10.0% and a 62.5% success rate. Ramey covers the Consumer Goods sector, focusing on stocks such as Post Holdings Inc, Brown-Forman B, and Flowers Foods.

Currently, the analyst consensus on Constellation Brands Inc is a Moderate Buy with an average price target of $229.60, a 50.4% upside from current levels. In a report issued on January 4, Wells Fargo also reiterated a Buy rating on the stock with a $260 price target.


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The company has a one-year high of $236.62 and a one-year low of $152.51. Currently, Constellation Brands Inc has an average volume of 2.2M.

Based on the recent corporate insider activity of 45 insiders, corporate insider sentiment is negative on the stock. Most recently, in October 2018, Richard Sands, the COB of STZ sold 148,773 shares for a total of $33,277,690.

TipRanks has tracked 36,000 company insiders and found that a few of them are better than others when it comes to timing their transactions. See which 3 stocks are most likely to make moves following their insider activities.

Constellation Brands, Inc. engages in the production, marketing, and distribution of beer, wine, and spirits. It operates through the following segments: Beer, Wine and Spirits, and Corporate Operations and Other. The Beer segment includes imported and craft beer brands.