Why Did Constellation Brands’ Stock Jump Over 3% After-Hours Today?

The Modelo maker’s beer unit strength offset weaker demand; traders toast gains even as the company trimmed full-year guidance.

Constellation Brands' investors breathed a sigh of relief after the beer and wine producer reported second-quarter results above expectations, giving the battered stock some firepower.

Shares rose 3.2% in after-hours trading on Monday, following the earnings release. The stock dropped 2.5% in the regular session and is down about 36% year-to-date.

On Stocktwits, the retail sentiment shifted to 'extremely bullish' as of late Monday, from 'bullish' the previous day, and 24-hour message volume rose over 1,300%.

"$STZ should hit $150 tomorrow.  Selling was over done," posted one bullish user.

"I'll celebrate with an 18 pack tonight courtesy of dumb [bear] money," said another user, with a picture of Modelo beer.

While many users expect the stock to rise in the coming days, a few struck a cautious tone, noting that Constellation Brands’ earnings beat came against a relatively low bar, as well as the company lowering its full-year profit outlook.

Investors await more details from the company's post-earnings call with analysts, scheduled for 8:00 a.m. ET on Tuesday.

Constellation Brands' net sales declined 15% to $2.48 billion, but came in higher than analysts' expectations of $2.46 billion. Quarterly profit of $3.63 per share also came in higher than the street estimate of $3.38 per share.

The company indicated that its beer business performed well in the last quarter, although demand for beer and spirits remains weak. More people are choosing to quit drinking, while Hispanic consumers, a key consumer group for Constellation Brands, are reeling from the impact of President Donald Trump's immigration raids, according to Constellation Brands.

On Monday, the company lowered its full-year non-adjusted earnings to $9.86 to $10.16 per share, down from its previous forecast of $10.77 to $11.07 per share. It maintained its adjusted earnings and revenue forecasts.

Notably, the company had cut its full-year guidance last month, citing demand weakness.

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