On Monday, Constellation Brands (NYSE:STZ) shares faced a downgrade by analysts at Jefferies, as the company's stock rating was lowered from 'Buy' to 'Hold.' Accompanying this change, the firm significantly reduced the price target for the beverage giant to $201 from the previous $310.
The adjustment comes in the wake of Constellation Brands reporting a miss across all segments and revising its guidance downward, attributing the downturn to challenging economic conditions, particularly noting the impact on Hispanic unemployment.
The analysts at Jefferies highlighted several factors influencing the downgrade, including the law of large numbers, strong performance from competitors like Michelob Ultra and Busch Light, and struggles within the wine and spirits business.
"STZ shares seem oversold, and they are buying back shares, but shares may trade at this discount until we see a re-acceleration. A show-me story. We think it is better to wait than guess. Downgrade to Hold," the analysts said.
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