QS Research · Michael Burry's Scion Capital analyst template · 2006
CONSTELLATION BRANDS, INC. (STZ)
As of 2026-11-09 · 12/15 boxes filled from SEC filings and market data
Conclusion: WATCH
Conviction low · base case none · downside -14% · upside +10%
At the 2026-11-06 close of $141.97 and $24.02B market cap, STZ trades at 12.5x TTM net income and 11.0x TTM EBITDA with a 7.7% FCF yield. Using the company's own 12.5x P/E on TTM net income of $1.92B gives about $24.0B equity, essentially today's price; a 14% earnings decline at the same multiple gives $20.6B (-14%) and a 10% earnings increase gives $26.4B (+10%). The beer franchise and cash returns support the stock, but core Modelo/Corona depletions and H2 margin compression offset the low multiple. This is a watch: the base case is flat and neither the long nor the short rule is met.
Key numbers
- Share price: $141.97
- Market cap: $24.02B
- Latest financial period: TTM to Aug 31, 2026
- Revenue (TTM): $9.83B
- EV / EBITDA (TTM): 11.0x
- P/E (TTM): 12.5x
- Price / book: 2.80x
The 15 boxes
- ✓ 1. Long-form business notes
STZ makes most of its money in U.S. beer: FY2026 Beer net sales were $8,315.2M of $9,139.0M consolidated, while Wine and Spirits was $823.8M after the June 2025 divestiture of mainstream wine brands. Between FY2021 and FY2026 the portfolio shifted sharply—Beer rose from $6,074.6M, Wine and Spirits fell from $2,540.3M, and the four-segment structure including Canopy became three segments. FY2026 XBRL shows revenue $9.14B, operating income $2.72B, operating cash flow $2.67B, and capex $875.0M; FY2025 operating income was $354.9M and net income -$81.4M.
- ✓ 2. Competitive advantage
The sources show a brand/IP-dependent, beer-concentrated business with sizable gross-profit dollars but volatile bottom-line results; they do not establish a durable competitive advantage. The FY2026 10-K competition section is mostly a list of price, entrant, distributor/retailer, and consumer-substitution risks, and it names no specific competitors. In the fiscal year ended 2026-02-28, operating income was $2.72B and net income $1.69B, but net income was negative in three of the six fiscal years shown.
- ✓ 3. 10-Q takeaways
Q2 FY2027 (three months ended Aug 31, 2026) net sales rose 6% to $2,633.0M, but reported operating income fell 8% to $805.0M as a $49.8M impairment hit; comparable operating income was $897M, +1%, and comparable EPS was $3.74, +3%. Beer net sales rose 5% with a 39.0% operating margin, while Wine and Spirits net sales rose 17% with a 3.8% operating margin. FY2027 guidance is numeric: reported EPS $11.85-$12.55, comparable EPS $11.20-$11.90, operating cash flow $2.4-$2.5B, and free cash flow $1.6-$1.7B. Cash was $98.5M and inventories $1,378.6M at Aug 31, 2026; buybacks were $530M year-to-date through September 2026.
- ✓ 4. Corporate governance
Filled; members read this box.
- ✓ 5. Overview of the prior 3 years of 8-K filings
Filled; members read this box.
- ✓ 6. Other significant filings
Filled; members read this box.
- ✓ 7. Chronology of significant news and events
Filled; members read this box.
- ✓ 8. Comparables valuation interpretation
Filled; members read this box.
- ✓ 9. Insider trading interpretation
Filled; members read this box.
- ○ 10. Earnings-call notes
- ○ 11. Impression of the shareholder letter
- ○ 12. Scuttlebutt overview
- ✓ 13. Valuation and risk/reward summary
Filled; members read this box.
- ✓ 14. Current price suppression and potential catalysts
Filled; members read this box.
- ✓ 15. Conclusions
The call above.
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