Constellation Brands Stock In Spotlight After Citi Downgrade: Retail Stays Bearish

Shares of Constellation Brands (STZ) were in focus on Thursday after the Corona beer maker received a downgrade from Citi, with retail sentiment staying bearish.

Citi downgraded Constellation Brands to ‘Neutral’ from ‘Buy’ with a price target of $200, reduced from $260, the Fly reported.

According to the analyst, the recent beer sales slowdown "could linger" with Hispanic consumer weakness, a trend that could persist, and softer trends in the U.S. beer category, in addition to looming tariff risks, said the report.

These factors would make it harder for Constellation to gain incremental shelf-space, said the report.

The analyst, however, noted the rise in Constellation's beer sales since 2014 as well as strong distribution gains, innovation, and faster growth across Hispanic consumers. It also noted that depletions slowed to 3% in Q2 and Q3 and its forecast a 2% decline in Q4.

Sentiment on Stocktwits remained ‘bearish’ from a day ago. Message volume inched up to ‘low’ from ‘extremely low.'

STZ sentiment meter and message volume on March 20

Constellation Brands has received a string of downgrades from Wall Street of late.

Morgan Stanley, for instance, downgraded Constellation Brands to ‘Equal Weight’ from ‘Overweight’ with a price target of $202, reduced from $220.

Constellation’s stock, along with several other alcohol and spirit companies, took a dive in January after the U.S. Surgeon General Vivek Murthy issued an advisory linking cancer to alcohol consumption.

A Gallup poll also showed that over the past two decades, consumers under 30 have been less inclined to drink alcohol at all.

Trump tariffs are widely expected to weigh on Constellation’s Mexican beer brands, Corona and Modelo.

Warren Buffett’s Berkshire Hathaway bought 5.6 million shares worth about $1.24 billion in Constellation last month.

Constellation stock is down 19% year-to-date.

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