In March 2025, the US government imposed a rate of 25% on imported aluminum before he increased taxes to 50% in June. This provides new challenges for companies that depend on metal packaging, such as for companies that sell Fransen and beers.
Constellation Brands (STZ), the $ 30.4 billion company behind big names such as Corona, Modelo and Kim Crawford, feels the pressure more than most. Constellation has fallen 35% compared to its 52 weeks high and runs behind the rest of the consumer's defense sector. The last quarterly report revealed the significant impact of these rates, with a turnover of 6% on an annual basis to year to $ 2.52 billion.
But despite the headwind in the short term, analysts in particular remain Bullish about the prospects of Constellation as a resilient dividend payer. What drives their optimism and still earns this dividend stock a place in your portfolio? Let's know.
Constellation Brands (STZ) is an important player in the beverage industry, known for his popular brands of beer, wine and spirits. Even with this approach, the share has made an effort, which means that more than 32% has fallen in the past year and since the beginning of the year almost 23%, because investors are concerned about rising costs and weaker income.
This caution appears in the figures, with the forward p/e of Constellation at 13.5x, which is lower than the sector average of 16.62x, which suggests that the share is traded with a discount, probably because the market expects more challenges.
The recent financial results of the company show why investors are worried. In the first quarter of the tax 2026, the net turnover fell by 6% to $ 2.52 billion. The business income fell by 24% to $ 714 million and the net result fell sharply by 41% to $ 516 million, because aluminium rates and higher costs had eroded the profit.
On the other hand, the free cash flow rose by 41% to $ 444 million, driven by the timing of brewery investments, and the company continued to buy back shares and returned $ 381 million to shareholders up to and including June.
Constellation brands do not only lean back, while rates make it difficult. The company recently sold its regular wine brands to concentrate on labels with a higher growth with a higher margin, so that its attention is shifted to wines that are usually priced above $ 15. This movement shows that Constellation bet that people want better quality, not just more options. The beer company is now the most important driver, good for more than 80% of the total turnover. Modelo Especial, now the best -selling beer in the US, together with Corona and Pacifico, is expected to help the sale of beer with no less than 3% in Fiscal 2026.
