Constellation Brands stock is climbing

By Erin Smith

Published: 24 January, 2014

Constellation Brands is starting 2014 on a high note, with its stock prices hitting a 52-week high last week of $81.51 on better than expected Q3 earnings and revenue reports.

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Last week's jump in stock price was on the heels of Constellation (NYSE: STZ) posting earnings of $1.10, far higher than the expected $0.91. Revenue increased by 88.2% to $1.44 billion which also beat expectations of $1.39 billion. 2014 is looking even brighter with an adjusted earnings per share of $3.10- $3.20, which is significantly higher than earlier projections of $2.80-$3.00.

In 2013 the conglomerate, which owns brands including Robert Mondavi, Arbor Mist, Ravenswood, Kim Crawford, Nobilo, SVEDKA Vodka and Black Velvet Canadian Whisky, had an impressive fiscal year resulting in the stock purchase price over doubling. The stock was trading just above $30 per share at the beginning of February 2013.

The consolidation of Constellation's Crown Imports and Anheuser Busch-InBev's Grupo Modelo SAB de CV's US beer business distribution deal is attributed to driving the revenue growth which has been outperforming Wall Street expectations.

It has also helped grow market share through product innovation and the use of technology. In December 2013, Constellation partnered with Hello Vino, a mobile wine app, to help US consumers find the appropriate wine for certain occasions over the holidays. Black Velvet produced a cinnamon flavoured whisky following the success of the caramel flavoured whisky the brand had previously released.

The future looks just as bright for Constellation Brands with a 21% projected revenue growth for fiscal 2015.

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