STZ

Defensive

Constellation Brands

Price Chart

Market Data

Financials

XBRL · SEC EDGAR

2009–2025(17yr)

Revenue

Net Income

Free CF

Metric	FY 2009	FY 2010	FY 2011	FY 2012	FY 2013	FY 2014	FY 2015	FY 2016	FY 2017	FY 2018	FY 2019	FY 2020	FY 2021	FY 2022	FY 2023	FY 2024	FY 2025Latest	YoY
Revenue	$4.7B	$4.2B	$4.1B	$3.0B	$3.2B	$5.4B	$6.7B	$7.2B	$7.3B	$7.6B	$8.1B	$8.3B	$8.6B	$8.8B	$9.5B	$10.0B	$10.2B	+2.5%
Gross Profit	$1.2B	$1.1B	$1.2B	$1.1B	$1.1B	$2.0B	$2.6B	$2.9B	$3.5B	$3.8B	$4.1B	$4.2B	$4.5B	$4.7B	$4.8B	$5.0B	$5.3B	+5.9%
Gross Margin	26.0%	27.2%	29.1%	35.7%	34.9%	36.8%	38.6%	40.7%	48.2%	50.4%	50.3%	49.8%	51.8%	53.4%	50.5%	50.4%	52.1%	+1.7pp
Operating Income	$29.6M	$311.5M	$502.5M	$486.5M	$522.9M	$2.4B	$1.5B	$1.8B	$2.4B	$2.3B	$2.4B	$2.2B	$2.8B	$2.3B	$2.8B	$3.2B	$354.9M	-88.8%
Operating Margin	0.6%	7.4%	12.3%	16.3%	16.5%	45.1%	22.5%	24.4%	32.8%	30.1%	29.7%	25.8%	32.4%	26.4%	30.1%	31.8%	3.5%	-28.3pp
Net Income	-$301.4M	$99.3M	$559.5M	$445.0M	$387.8M	$1.9B	$839.3M	$1.1B	$1.5B	$2.3B	$3.4B	-$11.8M	$2.0B	-$40.4M	-$71.0M	$1.7B	-$81.4M	-104.7%
Net Margin	-6.4%	2.4%	13.7%	14.9%	12.2%	35.9%	12.6%	14.6%	21.0%	30.6%	42.3%	-0.1%	23.2%	-0.5%	-0.8%	17.3%	-0.8%	-18.1pp
Free Cash Flow	$378.3M	$294.8M	$530.2M	$715.7M	$494.2M	$602.7M	$361.6M	—	—	$873.8M	$1.4B	$1.8B	$1.9B	$1.7B	$1.7B	$1.5B	$1.9B	+28.3%
FCF Margin	8.0%	7.0%	12.9%	24.0%	15.6%	11.1%	5.4%	—	—	11.5%	16.8%	21.9%	22.5%	19.0%	18.2%	15.2%	19.0%	+3.8pp

Total Debt$10.7B

Cash & Equiv.$68.1M

Net Debt$10.6B

4 min read

1. THE BIG PICTURE

Constellation Brands is undergoing a fundamental structural shift, moving away from being a broad-market alcohol distributor to becoming a specialized, high-margin beer powerhouse. While its Mexican beer portfolio—led by Modelo Especial—dominates the U.S. high-end segment, Constellation Brands is simultaneously managing a painful retreat from the mainstream wine market through massive divestitures. This transition leaves Constellation Brands more profitable but significantly more exposed to the regulatory and operational climate of a single country.

2. WHERE THE RISKS HIT HARDEST

Constellation Brands’s "Market Leadership" in the U.S. beer segment is directly threatened by its "Facility Concentration" in Mexico (10-K Item 1). While Constellation Brands cites its state-of-the-art glass plant as a competitive advantage that supplies 60% of its bottle requirements, this creates a critical vulnerability: any disruption at this single site or the limited number of Mexican breweries would materially damage the vast majority of the business (10-K Item 1A). Furthermore, the "Strategic Portfolio Positioning" toward premiumization is currently being tested by "Market Headwinds" in the wine category, where lower price points are decelerating so rapidly that Constellation Brands was forced to divest its mainstream brands to protect overall margins.

3. WHAT THE NUMBERS SAY TOGETHER

The financial data reveals a business that is shrinking in size to improve its quality. While net sales fell 10% in the most recent quarter, this was largely a structural result of the SVEDKA and 2025 Wine Divestitures rather than a loss of market share (8-K). In fact, the underlying beer business remains resilient; while flagship brands saw slight shipment declines, Pacifico and Victoria grew by 15% and 13% respectively (8-K).

(XBRL) Constellation Brands converts revenue to cash far more efficiently than its larger peers, boasting an 18.8% FCFFCFFree Cash Flow — cash left after paying for operations and capital investments; what the company can actually spend, save, or return to shareholders margin compared to PepsiCo’s 7.7%. This cash generation supports a 4.9% buyback yield—the highest in its peer group—suggesting management is using the "challenged" operating environment to aggressively retire shares. However, Constellation Brands carries a heavy debt load of $10.5 billion, resulting in a 6.0x net leverage ratio that requires disciplined capital allocation to maintain its 30% dividend payout target. Short interest stands at 5.1% of the float, indicating a notable level of market skepticism regarding the Wine and Spirits segment's performance or potential litigation outcomes.

4. IS IT WORTH IT AT THIS PRICE?

At a 12.2x Forward P/EP/EPrice-to-Earnings ratio — share price divided by annual earnings per share; how much investors pay per dollar of profit. Higher P/E = higher growth expectations, Constellation Brands trades at a modest discount to its peer median of 17.7x. According to (CAPM analysis), this 12.2x multiple implies the market is pricing in a long-term growth rate of just 0.5%. This appears conservative given Constellation Brands’s TTMTTMTrailing Twelve Months — the most recent full year of financial data, updated on a rolling basis each quarter revenue growth of 2.5% and its ongoing expansion of Mexican brewery capacity to 55 million hectoliters by 2028 (10-K Item 1).

The discount is likely a reflection of the "Litigation Exposure" related to securities law violations and the risk of international trade tariffs (10-K Item 1A). If Constellation Brands achieves even a GDP-pace growth of 2.5%, the justified multiple would rise to 23.1x. Investors are essentially getting a high-margin, market-leading beer business at a discount because of the volatility in its shrinking wine segment and the legal clouds hanging over its past disclosures.

5. WHAT WOULD CHANGE THIS VIEW?

Constructive if beer depletion rates for Modelo Especial return to growth alongside the double-digit expansion of Pacifico, signaling that the "premiumization" trend is accelerating.
Cautious if the multi-billion-dollar Mexico beer projects face further "cost overruns" or if the "class action lawsuits" regarding the Wine and Spirits business result in material financial judgments.

6. BOTTOM LINE

Structural Advantage: Perpetual, exclusive U.S. import rights for the world’s fastest-growing Mexican beer portfolio, supported by a vertically integrated glass supply chain. Bottom Line: Constellation Brands is an attractively valued cash-flow machine whose primary risks are geographic and legal, not competitive.

Source: Synthesis · LLM Analysis

4 min read

1. Top 5 Material Risks

Dependence on Mexican Beer: Sales of Mexican beer brands represent the vast majority of the business; shifts in consumer preferences, pricing, or economic conditions that reduce consumption of these products could materially affect results of operations.
Capital Projects and Facility Concentration: Constellation Brands is dependent on a limited number of Mexican breweries and a single glass plant; multi-billion-dollar expansion and optimization projects are subject to completion delays, cost overruns, and potential asset impairments.
Litigation Exposure: Constellation Brands is currently subject to multiple class action and derivative lawsuits alleging securities law violations regarding disclosures about the Wine and Spirits business, which could result in substantial defense costs and adverse judgments.
Supply Chain and Raw Material Volatility: Operations rely on the consistent supply of quality water, glass, aluminum, and agricultural materials; disruptions or price increases in these inputs—particularly glass bottles, which are a primary component of cost of product sold—can materially impact profitability.
International Trade and Tariffs: Recent and potential future tariffs on imports from Mexico, Italy, and New Zealand, as well as retaliatory tariffs on U.S. goods, create uncertainty that could increase costs and disrupt global supply chains.

2. Company-Specific Risks

Sands Family Influence: The Sands Family Stockholders hold significant influence over corporate decisions through their Class A Stock ownership and Board nomination rights, which may lead to conflicts of interest with other stockholders regarding acquisitions or corporate opportunities.
Wine and Spirits Headwinds: The wine and spirits business faces ongoing category headwinds and inventory destocking by retailers, which have already necessitated significant impairment losses and write-offs.
Canopy Growth Association: Constellation Brands’s investment in Canopy Growth has resulted in significant impairment losses and is subject to specific debt covenants that restrict the use of loan proceeds for transactions with or funding of Canopy until a "Specified Time."
Choice-of-Forum Provision: Constellation Brands’s bylaws mandate that Delaware courts are the exclusive forum for derivative actions and certain other litigation, which may increase costs for stockholders and limit their ability to bring claims in other jurisdictions.

3. Regulatory/Legal Risks

Global Minimum Tax (Pillar Two): Many jurisdictions where Constellation Brands operates are implementing the OECD’s 15% global minimum tax framework, which may significantly increase Constellation Brands’s effective tax rate.
Environmental Compliance: Constellation Brands faces evolving and complex regulations regarding climate change and CSR reporting; failure to meet self-imposed targets or comply with new disclosure rules could lead to enforcement actions, fines, or litigation.
Alcohol Regulation: Governmental bodies may impose stricter labeling, warning requirements (such as cancer risk warnings), or advertising restrictions, which could inhibit sales or increase compliance costs.
Securities Litigation: Constellation Brands is defending against multiple lawsuits (e.g., Meza v. Constellation Brands, Inc. and Silva v. Newlands) asserting claims under the Exchange Act, which could result in unspecified damages and legal fees.

4. Financial Impact Map

Dependence on Mexican Beer → Net Sales → Represents the vast majority of the business; any decline in growth rate or profitability directly impacts consolidated revenue.

Capital Projects and Facility Concentration → Property, Plant, and Equipment / Impairment Charges → Multi-billion-dollar investments are subject to asset impairments if projects are abandoned or fail to meet financial expectations.

Litigation Exposure → Selling, General, and Administrative Expenses → Substantial time and costs are required to defend against class action and derivative lawsuits.

Supply Chain and Raw Material Volatility → Cost of Product Sold → Glass bottle costs are one of the largest components of cost of product sold; price increases or shortages directly compress margins.

International Trade and Tariffs → Cost of Product Sold / Net Sales → Tariffs on imports from Mexico, Italy, and New Zealand increase production costs and may inhibit sales if Constellation Brands cannot pass costs to consumers.

Source: 10-K Item 1A · LLM Analysis

Recent Filings

Form	Filed	Period
10-Q	Jan 2026	Nov 2025
8-K	Jan 2026	—
14A	Jun 2025	—
10-K	Apr 2025	Feb 2025