Constellation Brands, Inc., together with its subsidiaries, produces, imports, markets, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. The company provides beer primarily under the Corona Extra, Corona Familiar, Corona Hard Seltzer, Corona Light, Corona Non-Alcoholic, Corona Premier, Corona Refresca, Modelo Especial, Modelo Chelada, Modelo Negra, Modelo Oro, Victoria, Vicky Chamoy, and Pacifico brands. It also offers wine under the Cook's California Champagne, Kim Crawford, Meiomi, Mount Veeder, Ruffino, SIMI, My Favorite Neighbor, Robert Mondavi Winery, Schrader, and The Prisoner Wine Company brands; and spirits under the Casa Noble, Copper & Kings, High West, Mi CAMPO, Nelson's Green Brier, and SVEDKA brands. The company provides its products to wholesale distributors, retailers, on-premise locations, and state alcohol beverage control agencies. Constellation Brands, Inc. was founded in 1945 and is headquartered in Victor, New York.

Constellation Brands looks like a high-quality but not cheap business: in terms of earnings and margins, the company is noticeably stronger than the industry median, but its valuation on revenue and balance-sheet multiples remains high. A P/E of 14.47 is below the industry median, which supports the idea of moderate undervaluation on earnings, but a P/S of 2.68 and a P/B of 3.42 are significantly above the market, so the stock looks expensive on revenue and capital. A P/FCF of 13.18 is below the median, which is a positive and suggests a reasonable price relative to free cash flow. STZ’s profitability is strong: ROE of 21.28%, ROA of 7.73%, operating margin of 29.78%, and net margin of 18.46% are all significantly above the industry, which usually justifies a valuation premium. At the same time, the dynamics of earnings and operating results over recent periods look weaker: net income, operating income, EBITDA, and gross profit are below recent peaks, which limits the potential for rerating. Revenue has also declined from higher levels in the previous year, so business growth has not yet confirmed aggressive upside. The debt burden remains notable: debt/equity of 1.16 is above the industry median, long-term debt is high, and liquidity is weak — a quick ratio of 0.55 and a current ratio of 1.08 indicate limited financial cushion. Dividend yield is currently zero, whereas it was previously around 0.4–0.6%, meaning the dividend factor no longer supports the investment case. A strong equity balance and high net worth partially offset the debt risk, but do not eliminate it entirely. Overall, the fundamentals support a moderately cautious view: the business quality is high, but valuation on some multiples and the deterioration in several operating indicators do not justify a significant increase in the target price. For an investor, this is a story of resilient margins and profitability, but with limited short-term upside due to pressure on revenue, liquidity, and the capital structure.

Constellation Brands, Inc.

Сильный индекс, значительно упал. Быки в растерянности.

Strong index, significantly down. The bulls are confused.

Слабый индекс, незначительно вырос. Рынок на стороне быков.

Weak index, slightly up. The market is on the bulls' side.

Слабый индекс, незначительно вырос

STZ’s high margin and profitability support the valuation, but weak liquidity, significant debt, and the decline in revenue/EBITDA limit upside.

The Boston Beer Company, Inc. SAM is reshaping its portfolio as consumer preferences move toward spirits-based ready-to-drink beverages, smaller packs and targeted formats.
That shift is increasingly important because the company’s older growth engines are losing momentum. Innovation is improving mix, but core-brand weakness continues to weigh on overall volume.
Boston Beer Shifts Toward Spirits RTDs
Sun Cruiser delivered triple-digit depletion growth in the second quarter and continues to expand distribution. The brand is also adding favorable revenue and margin mix, giving Boston Beer a stronger foothold in spirits-based tea and lemonade.
Image Source: Zacks Investment Research
That growth contrasts with Twisted Tea’s pressure. Twisted Tea remains dominant in malt-based hard tea, but it is facing lower sales velocities, reduced feature and display activity and rising competition from spirits-based hard teas.
Consumer behavior is also shifting away from larger pack sizes. The 12-pack format remains the largest source of Twisted Tea’s volume decline, showing how hard tea demand is changing beneath the category headline.
SAM's Pack and Format Changes Target Demand
Boston Beer is responding with smaller packs, single-serve formats, value packs and more targeted offerings. Twisted Tea Light and Twisted Tea Extreme are part of that effort, along with new flavors and broader distribution.
The same logic applies to Truly. High-alcohol Truly Unruly and Wild Berry continue to outperform other styles, giving management narrower areas for investment as the broader brand resets.
Molson Coors Beverage Company TAP is a relevant peer for investors watching how large beverage companies manage shifting demand across beer and flavored malt beverages. Constellation Brands, Inc. STZ also provides useful context because it competes across beer, wine and spirits, where portfolio mix matters heavily.
Boston Beer's Supply Chain Gains Support Mix
Boston Beer produced 84% of domestic volume at company-owned facilities in the second quarter, up from 76% a year earlier. That shift supports brewery utilization and gives the company more control over production economics.
The margin benefit is already visible. Second-quarter gross margin rose 60 basis points year over year to 50.4%, helped by brewery efficiencies, procurement savings, favorable product mix and pricing.
Management expects domestic internal production to exceed 90% for the full year. If achieved, that could strengthen the economics of newer and higher-mix products while reducing reliance on third-party production.
SAM's Cost Inflation Complicates the Pivot
The pivot is not cost-free. Freight rates rose more than 35% year over year, adding pressure even as lower volumes helped offset some shipment costs.
Aluminum, energy and tariff exposure also remain concerns. Boston Beer expects tariff costs of $20 million to $30 million for 2026, which could limit the upside from pricing and productivity.
Shortfall fees and non-cash third-party production prepayments are another drag. Management expects those items to reduce full-year gross margin by 40 to 60 basis points.
Boston Beer Signals Lag the Trend Story
The bottom line is that Boston Beer has a credible portfolio-renewal story, but it is still early. Sun Cruiser and Angry Orchard are growing, yet their gains have not offset weakness in Twisted Tea, Truly, Samuel Adams and Dogfish Head.
Image Source: Zacks Investment Research
The stock currently carries a Zacks Rank #5 (Strong Sell), signaling that emerging-product momentum has not overcome falling earnings estimates and weak overall demand. That makes the near-term investment setup defensive.
SAM’s Growth Score of B and VGM Score of B acknowledge portfolio-renewal potential. The Momentum Score of F and Value Score of C reflect the market and valuation challenges around that transition.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Boston Beer Rides RTD Growth While Core Brands Lose More Momentum

The Boston Beer Company, Inc. SAM has financial strengths that should not be dismissed. It has no debt, solid cash generation and improving gross margins.
The problem is that weak demand is cutting into earnings visibility. For investors, the question is whether balance-sheet resilience can offset estimate cuts, lower volumes and a valuation that still looks demanding.
SAM's Valuation Looks Stretched
SAM trades at 18.29X forward 12-month earnings. That compares with 15.28X for its Zacks sub-industry and 16.98X for the broader Zacks sector
Image Source: Zacks Investment Research
The premium is harder to defend while volumes are declining. The $153 price target, based on 17.21X forward 12-month earnings, sits below the $180.15 share price and points to downside risk.
The stock does trade below its five-year median multiple of 26.34X. Still, a lower-than-historical valuation does not automatically make the shares attractive when earnings expectations are falling.
Constellation Brands STZ and Molson Coors Beverage Company TAP offer relevant peer context for investors tracking alcohol demand, pricing power and category share shifts. Both stocks sit in the same broader beverages-alcohol investment discussion as SAM.
Boston Beer's Earnings Visibility Weakens
Boston Beer posted second-quarter adjusted earnings of $3.65 per share, missing the Zacks Consensus Estimate of $4.77. The figure declined 33% from the year-ago quarter.
Revenues fell 3.3% to $568 million. Lower volumes and higher marketing costs weighed on results, even as pricing and favorable mix helped cushion part of the pressure.
Estimate revisions are also negative. The fiscal-year earnings estimate fell 10.5% over four weeks and 13.25% over 12 weeks, reinforcing a weaker near-term earnings setup.
SAM's Balance Sheet Limits Financial Risk
SAM ended the second quarter with $265.5 million in cash and no debt. The company also had full availability under its $150 million revolving credit facility.
First-half operating cash flow totaled $117.6 million, while capital expenditures were $22.9 million. Those figures show that the business is still producing cash despite softer demand.
Management also reduced its full-year capital-spending outlook to $60 million to $80 million from $70 million to $90 million. That gives the company more flexibility as it focuses spending on brewery capabilities, efficiency and innovation.
Boston Beer Catalysts Need Time to Build
Boston Beer still has levers that could support profitability. Management expects price increases of 1% to 2%, while supply-chain productivity and higher internal production should help margins.
Internal production reached 84% of domestic volume in the second quarter, up from 76% a year earlier. Management expects that rate to exceed 90% for the full year.
Image Source: Zacks Investment Research
Sun Cruiser delivered triple-digit depletion growth, and Angry Orchard grew for a fifth consecutive quarter. Those gains support portfolio renewal.
The offset is that companywide volumes remain under pressure. Tariff costs are expected to total $20 million to $30 million, freight inflation remains a concern and litigation exposure continues to cloud reported earnings and cash deployment.
SAM Signals Favor Caution
The bottom line is that SAM’s balance sheet and margin progress help limit financial risk, but they do not yet fix the demand problem. A buying case would be stronger with clearer evidence that volumes and core brand trends are stabilizing.
The stock currently carries a Zacks Rank #5 (Strong Sell), reflecting negative earnings-estimate revisions and weak near-term momentum. That signal favors caution.
SAM’s Growth Score of B and VGM Score of B recognize areas of operating potential. The Value Score of C and Momentum Score of F suggest the risk-reward profile remains unattractive without stronger demand stabilization.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is SAM Stock Worth Buying After Earnings Misses and Estimate Cuts?

Boston Beer Company, Inc. SAM is showing two different operating stories at once. Demand remains soft, with weaker depletions, lower shipments and pressure across several major brands.
At the same time, pricing, mix and brewery productivity are helping margins. That divergence makes execution on newer products increasingly important while the company works through weak consumer take-away.
Boston Beer Volume Trends Point Lower
Second-quarter depletions declined 6%, while shipment volume fell 4.5% to roughly 2 million barrels. First-half shipments dropped 5.6%, modestly trailing a 5% decline in depletions.
Image Source: Zacks Investment Research
Distributor inventories averaged about 4.5 weeks on hand, consistent with the prior-year period. That suggests the weakness reflects consumer demand rather than excess wholesaler inventory.
Management maintained its full-year volume outlook for depletions and shipments to decline in the low- to mid-single-digit range. Current trends point toward the lower end of that range.
SAM Core Brands Keep Losing Ground
Shipments declined across Twisted Tea, Truly, Samuel Adams, Hard Mountain Dew and Dogfish Head. Gains in Sun Cruiser and Angry Orchard only partly offset the broader weakness.
Image Source: Zacks Investment Research
Twisted Tea remains pressured by lower sales velocity, reduced feature and display activity, competition from spirits-based hard teas and a shift away from larger pack sizes. The 12-pack format remains the largest source of volume decline.
Truly’s marketing and soccer-related promotions improved marketplace presence but did not generate the expected demand response. Boston Beer is now reducing spending behind the brand.
Molson Coors Beverage Company TAP remains a relevant comparison because it also competes across beer and flavored malt beverage categories. Constellation Brands STZ provides another useful industry reference, given its exposure to premium beer and broader alcohol demand trends.
Boston Beer's Margins Show Resilience
Boston Beer’s second-quarter gross margin expanded 60 basis points year over year to 50.4%. Pricing, favorable product mix, procurement savings and brewery efficiencies helped offset inflationary, commodity and tariff costs.
Internal production also improved. The company produced 84% of domestic volume at company-owned facilities in the quarter, up from 76% a year earlier.
Management expects domestic internal production to exceed 90% for the full year, compared with 86% in 2025. That shift should support better control over costs, capacity and supply-chain execution.
SAM Innovation Offers Selective Upside
Sun Cruiser delivered triple-digit depletion growth in the second quarter and continues to expand distribution. Angry Orchard grew for the fifth consecutive quarter, helped by Angry Orchard Crisp and Crisp Imperial.
Boston Beer is also expanding Sinless Vodka Cocktails in more than 30 states and LYTT Electric Coolers in more than five states. These launches are early, but they show where the company is trying to refresh the portfolio.
Still, innovation has not restored companywide volume growth. Larger established brands remain the main drag, keeping the operating outlook dependent on selective wins and sharper execution.
Boston Beer Signals Remain Defensive
The bottom line is that Boston Beer is protecting margins better than it is protecting volume. Pricing, mix and brewery efficiencies are helping profitability, but soft demand and brand-share pressure continue to limit the near-term setup.
The stock currently carries a Zacks Rank #5 (Strong Sell), which fits a backdrop of negative earnings-estimate revisions and weak near-term momentum. Its Growth Score of B and VGM Score of B point to relatively better growth and blended style characteristics.
Those positives are offset by a Value Score of C and a Momentum Score of F. Until demand trends improve, operating gains alone have not translated into a more favorable stock signal.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Boston Beer Faces Weak Demand While Margins and Innovation Diverge

Constellation Brands, Inc. STZ maintains a solid foothold in the beer, wine and spirits market, driven by its focus on premiumization, a strong lineup of brands and prudent portfolio management. Its portfolio comprises a broad array of consumer-centric, premium labels, such as Modelo Especial, Corona Extra, Pacifico, Robert Mondavi Winery, Kim Crawford, The Prisoner Wine Company and High West. Leveraging the strength of these brands, the company remains well-positioned to meet evolving consumer tastes and benefit from growth opportunities in the global beverage industry.
Constellation Brands is focused on building a portfolio centered on high-margin, fast-growing segments within the beverage alcohol industry, supported by its direct-to-consumer capabilities and expanding global footprint. Its flagship beer brands — Modelo, Corona and Pacifico — remain key growth engines, strengthening the company’s position in the U.S. beer market. Constellation Brands continues to invest in its Power Brands through product innovation and by capitalizing on evolving consumer preferences with successful new offerings.
The company has increasingly aligned its strategy around its core, high-growth premium brands across the beer, wine and spirits categories. This approach is aimed at expanding market share, enhancing margins and supporting sustainable long-term growth. Constellation Brands’ ongoing brand-building initiatives, coupled with the strong performance of its beer business, continued premiumization efforts, product innovation and cost-saving measures, remain key positives.
In a nutshell, the company’s strategy is its focus on core premium brands, which enables it to benefit from premiumization trends, boost profitability and solidify its leadership in the beverage alcohol space. Sustained consumer demand for premium beverages is likely to remain an important catalyst for Constellation Brands’ long-term growth.
STZ’s Price Performance, Valuation & Estimates
Shares of Constellation Brands have lost 4% in the past six months compared with the industry’s growth of 11.3%.
Image Source: Zacks Investment Research
From a valuation standpoint, STZ trades at a forward price-to-earnings ratio of 11.11X compared with the industry’s average of 14.92X.
Image Source: Zacks Investment Research
The Zacks Consensus Estimate for STZ’s fiscal 2027 earnings per share (EPS) remains breakeven while that of fiscal 2028 indicates year-over-year growth of 3.4%. The company’s EPS estimate for fiscal 2027 and fiscal 2028 has moved south in the past seven days.
Image Source: Zacks Investment Research
Constellation Brands stock currently carries a Zacks Rank #3 (Hold).
Stocks to Consider in the Consumer Staples Space
The Chefs' Warehouse, Inc. CHEF, which is a distributor of specialty food products in the United States, currently sports a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.
The Zacks Consensus Estimate for Chefs' Warehouse's current financial-year sales indicates growth of 8.3% from the prior-year level. CHEF delivered a trailing four-quarter earnings surprise of 28.9%, on average.
Nomad Foods Limited NOMD, which manufactures and distributes frozen foods, currently carries a Zacks Rank #2 (Buy).
The consensus estimate for Nomad Foods’ current financial-year sales is expected to rise 0.5% from the year-ago reported figure. NOMD delivered a trailing four-quarter earnings surprise of 8.6%, on average.
Medifast, Inc. MED, which is a leading manufacturer and distributor of clinically-proven healthy living products and programs, currently carries a Zacks Rank of 2. MED delivered an average earnings surprise of 65.5% in the last reported quarter.
The Zacks Consensus Estimate for Medifast’s current financial-year sales indicates a decline of 26% from the year-ago number.
Zacks' Research Chief Names "Stock Most Likely to Double"
Our team of experts has just released the 5 stocks with the greatest probability of gaining +100% or more in the coming months. Of those 5, Director of Research Sheraz Mian highlights the one stock set to climb highest.
This top pick is a little-known satellite-based communications firm. Space is projected to become a trillion dollar industry, and this company's customer base is growing fast. Analysts have forecasted a major revenue breakout in 2025. Of course, all our elite picks aren't winners but this one could far surpass earlier Zacks' Stocks Set to Double like Hims & Hers Health, which shot up +209%.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
MEDIFAST INC (MED) : Free Stock Analysis Report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Premiumization and Brand Strength Drive Constellation Brands' Growth

For Immediate Release
Chicago, IL – July 8, 2026 – Today, Zacks Equity Research discusses Anheuser-Busch InBev BUD, Diageo Plc DEO, Constellation Brands Inc. STZ, Brown-Forman Corp. BF.B and Molson Coors Beverage Company TAP.
Industry: Alcoholic Beverages
Link: https://www.zacks.com/commentary/2949145/5-alcohol-stocks-to-watch-amid-changing-consumer-preferences
Players in the Zacks Beverages – Alcohol industry are navigating a period of structural change as evolving consumer preferences and cost pressures reshape the competitive landscape. Moderation trends, particularly among younger and health-conscious consumers, are weighing on long-term demand for traditional beer, wine and spirits, creating concerns over sustainable volume growth. At the same time, tariffs and elevated costs for packaging, freight, labor and agricultural inputs are pressuring margins, especially for companies with global supply chains and limited pricing power.
However, the industry also offers meaningful growth opportunities through innovation. Expanding demand for ready-to-drink cocktails, and low and no-alcohol beverages is creating revenue streams, while companies that diversify their portfolios and adapt to changing consumption habits are better positioned to offset volume headwinds.
For investors, success will likely depend on companies' ability to balance pricing power, cost discipline and product innovation while capitalizing on evolving consumer preferences. Leading players, including Anheuser-Busch InBev, Diageo Plc, Constellation Brands Inc., Brown-Forman Corp. and Molson Coors Beverage Company, look well-placed to capitalize on these trends.
About the Industry
The Zacks Beverages – Alcohol industry mainly comprises producers, importers, exporters, marketers and sellers of alcoholic beverages like beer, craft beer, ciders, wine, rum, whiskey, liqueurs, vodka, tequila, champagnes, brandy, amaretto, ready-to-drink (RTD) cocktails and malt. Some industry players also produce and sell non-alcoholic beverages like carbonated soft drinks, sparkling waters, bottled water, energy drinks, powdered and natural juices, and RTD teas.
The companies sell products through wholesalers and retailers like supermarkets, warehouse clubs, grocery stores, convenience stores, package stores, drug stores and other retail outlets. The industry participants also sell beer directly to consumers in cans and bottles at restaurants, pubs, bars and liquor stores. Some brewers operate brewpubs or tasting rooms at breweries, offering consumers the freshest beer.
What's Shaping the Future of Beverages - Alcohol Industry
Moderation Trend Pressure Alcohol Consumption: Moderation is becoming a structural headwind for alcohol companies. Younger consumers, particularly Gen Z, are drinking less, and health-conscious buyers across age groups increasingly favor balanced lifestyles. Consumers are shifting occasions away from traditional alcohol, and low or no-alcohol alternatives are gaining share.
For investors, this raises concern over long-term volume growth across beer, wine and spirits. Even if pricing supports revenues, weaker consumption can limit operating leverage and make growth more dependent on innovation. Companies with high exposure to legacy alcohol categories may face slower depletion trends, higher promotional needs and weaker earnings visibility if moderation continues to reshape drinking behavior.
Tariffs Could Squeeze Margins: Tariffs are emerging as a meaningful overhang for U.S. beverage alcohol companies with global sourcing and international supply chains. Higher duties on imported glass bottles, aluminum, packaging materials and select beverage imports can raise input costs, forcing producers to either absorb the increase or pass it on to consumers.
While premium brands have greater pricing flexibility, mass-market labels remain more vulnerable to demand erosion from higher shelf prices. Investors should watch for margin pressure, procurement disruptions and slower earnings growth, particularly among companies with significant import exposure or limited domestic sourcing capabilities.
Beyond tariffs, alcohol producers continue to navigate elevated costs across packaging, freight, labor and agricultural inputs. Although inflation has moderated from peak levels, cost volatility remains a key earnings risk, especially if companies are unable to fully offset higher expenses through pricing. Promotional activity may also increase as consumers become more value-conscious, pressuring the gross margin.
Innovation Beyond Traditional Alcohol Creates Growth Runway: Despite softer industry volumes, beverage companies are unlocking growth opportunities through innovation. Demand for ready-to-drink cocktails continues to outpace most traditional alcohol categories as consumers seek convenience, flavor variety and affordability.
At the same time, low and no-alcohol beverages are evolving into a meaningful profit pool rather than a niche offering, attracting consumers who want moderation without abandoning social drinking. Leading brewers and spirits companies are expanding product portfolios to address these changing occasions, allowing them to capture incremental demand instead of relying solely on traditional alcohol consumption. Successful innovation could offset category pressures and strengthen long-term market positioning.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Beverages – Alcohol industry is a 17-stock group within the broader Zacks Consumer Staples sector. The industry currently carries a Zacks Industry Rank #189, placing it at the bottom 23% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential.
Before we present a few stocks that you may want to consider for your portfolio, let us take a look at the industry’s recent stock-market performance and valuation picture.
Industry Underperforms S&P 500
The Zacks Beverages – Alcohol industry has outperformed the broader sector and underperformed the S&P 500 in the past year.
The stocks in the industry have collectively returned 4.1% in the past year, whereas the Zacks Consumer Staples sector has risen 1.6%. Meanwhile, the Zacks S&P 500 composite has rallied 23.9%.
Beverages - Alcohol Industry's Valuation
Based on the forward 12-month price-to-earnings (P/E) ratio, commonly used to value Consumer Staples stocks, the industry is currently trading at 15.27X compared with the S&P 500’s 21.07X and the sector’s 17.26X.
Over the last five years, the industry traded as high as 24.1X, as low as 13.77X and at the median of 18.39X.
5 Alcohol Beverages Stocks to Keep a Close Eye On
None of the stocks in the Zacks Beverages – Alcohol space currently sports a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy). However, we have selected five stocks with a Zacks Rank #3 (Hold) to watch from the same industry. You can see the complete list of today’s Zacks #1 Rank stocks here.
Let us have a look at the companies.
Anheuser-Busch InBev: Also known as AB InBev, this is a global brewing leader with a portfolio of iconic brands spanning diverse geographies. Its leading positions across key markets and expansive global footprint provide meaningful scale advantages, enabling efficient operations and the ability to grow multi-country brands worldwide. The company continues to benefit from resilient consumer demand for its core brands, supported by strong business momentum, driven by disciplined execution, sustained brand investment and an accelerated digital transformation agenda. Premiumization remains a central growth lever, as consumers increasingly trade up within the beer category.
Beyond core beer, AB InBev is steadily expanding its Beyond Beer portfolio, encompassing ready-to-drink offerings, such as canned wines and cocktails, along with hard seltzers, ciders and flavored malt beverages. This diversification strategy is enhancing relevance across occasions and consumer segments, while providing an incremental growth runway and supporting top-line momentum. The Zacks Consensus Estimate for AB InBev’s 2026 sales and earnings suggests growth of 8.4% and 15.8% from the year-ago period’s reported figures. The consensus mark for the company’s 2026 earnings has moved down by a penny in the past seven days. The Zacks Rank #3 stock has gained 15.8% in the past year.
Diageo: The stock of this London-based leading beverage company has declined 22.4% in the past year. DEO operates in approximately 180 countries, and is involved in producing, distilling, brewing, bottling, packaging and distributing spirits, wine and beer. The company continues to place innovation and consumer moderation at the center of its long-term growth strategy, addressing evolving consumption patterns and diversifying its portfolio. Innovation remains a key driver, with strong momentum across tequila, whisky, beer and RTD formats.
Equally important is Diageo’s push into moderation, wherein it has established clear leadership in non-alcoholic spirits. The company is refining its $2-billion productivity program to drive efficiency across the business while ensuring long-term sustainable growth. A key focus is balancing cost savings with strategic reinvestment, particularly in marketing and brand activation. The Zacks Consensus Estimate for Diageo’s fiscal 2027 EPS has edged down 0.3% in the past 30 days. The consensus estimate for fiscal 2027 sales and earnings suggests declines of 1.4% and 1.8%, respectively, from the year-ago period’s reported figures. The company currently has a Zacks Rank #3.
Constellation Brands: The Victor, NY-based third-largest beer company and a leading, high-end wine company in the United States continues to benefit from a sharp focus on brand building and a steady cadence of innovation. The company’s premiumization strategy remains a key growth driver, led by the sustained strength of the Modelo and Corona brand families and continued traction across its Power Brands portfolio. Its beer business is benefiting from premium and above-premium trends, supported by growth in traditional beer and adjacent categories, such as flavored beer, seltzers, RTD spirits and flavored malt beverages.
STZ is actively investing to extend the momentum of its Power Brands, aligning innovation with evolving consumer preferences and delivering successful product launches. Meanwhile, the company’s digital momentum continues to build through platforms, such as Instacart, Drizly and retailer-owned channels, reflecting consumers’ growing preference for convenience-driven purchasing. The Zacks Consensus Estimate for STZ’s fiscal 2027 earnings per share has moved down 0.2% in the past seven days. The consensus estimate for fiscal 2027 earnings suggests a decline of 0.2% from the year-ago period’s reported figure. The Zacks Rank #3 stock has lost 23.4% in the past year.
Brown-Forman: Based in Louisville, KY, this is a global spirits company that manufactures, distills, bottles, imports, exports, markets and sells a broad portfolio of premium alcoholic beverages. The company’s growth strategy is anchored in premiumization, with a clear focus on high-quality, premium and super-premium spirits that support brand equity and margin resilience. The portfolio has been streamlined around core power brands such as Jack Daniel’s and Woodford Reserve, complemented by successful additions like the Jack Daniel’s and Coca-Cola RTD, and the integration of super-premium labels Gin Mare and Diplomático.
Emerging markets continue to provide a strong growth offset, driven by rising middle-class demand and momentum across the Jack Daniel’s family. Disciplined pricing, innovation, distribution evolution and tighter cost-control underpin long-term value creation despite near-term pressures. The Zacks Consensus Estimate for BF.B’s fiscal 2027 sales and earnings suggests growth of 0.4% and 11.8%, respectively, from the year-ago period’s reported figures. The consensus mark for the Zacks Rank #3 company’s fiscal 2026 earnings has moved up 1.8% in the past 30 days. BF.B has declined 9.5% in the past year.
Molson Coors: The stock of this Chicago, IL-based leading beverage company has declined 21.3% in the past year. TAP is on track with its revitalization plan, focused on achieving sustainable top-line growth by streamlining its organization and reinvesting resources into its brands and capabilities. Investments, partnerships and product launches, which are part of its revitalization plan, have been aiding the company.
Molson Coors has been committed to increasing its market share through innovation and premiumization. Intending to accelerate portfolio premiumization, TAP has been aggressively growing its above-premium portfolio in the past few years. The Zacks Consensus Estimate for Molson Coors’ 2026 EPS has been unchanged in the past 30 days. The consensus estimate for the Zacks Rank #3 company’s 2026 sales and earnings suggests declines of 0.1% and 11.4%, respectively, from the year-ago period’s reported figures.
Free: Instant Access to Zacks' Market-Crushing Strategies
Since 2000, our top stock-picking strategies have blown away the S&P's +7.7% average gain per year. Amazingly, they soared with average gains of +48.4%, +50.2% and +56.7% per year.
Today you can tap into those powerful strategies – and the high-potential stocks they uncover – free. No strings attached.
Get all the details here >>
Media Contact
Zacks Investment Research
800-767-3771 ext. 9339
https://www.zacks.com
Past performance is no guarantee of future results. Inherent in any investment is the potential for loss. This material is being provided for informational purposes only and nothing herein constitutes investment, legal, accounting or tax advice, or a recommendation to buy, sell or hold a security. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. It should not be assumed that any investments in securities, companies, sectors or markets identified and described were or will be profitable. All information is current as of the date of herein and is subject to change without notice. Any views or opinions expressed may not reflect those of the firm as a whole. Zacks Investment Research does not engage in investment banking, market making or asset management activities of any securities. These returns are from hypothetical portfolios consisting of stocks with Zacks Rank = 1 that were rebalanced monthly with zero transaction costs. These are not the returns of actual portfolios of stocks. The S&P 500 is an unmanaged index. Visit https://www.zacks.com/performance for information about the performance numbers displayed in this press release.
Beyond Nvidia: AI's Second Wave Is Here
The AI revolution has already minted millionaires. But the stocks everyone knows about aren't likely to keep delivering the biggest profits. AI’s second wave is moving from infrastructure to implementation and these companies are at the forefront of this transition, positioned to become what Amazon and Google were to the internet era.
See Stocks Now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Zacks Industry Outlook Highlights Anheuser-Busch, Diageo, Constellation Brands, Brown-Forman and Molson Coors Beverage

Constellation Brands STZ sits at the center of two important alcohol trends. Beer demand is still carrying the business, while wine and spirits remain in reset mode after portfolio actions.
The question for investors is whether premium brands and cost savings can offset uneven consumer spending, tariffs and higher marketing needs. The latest numbers show both resilience and pressure.
Beer Demand Remains the Main Signal
Beer remains the clearest source of operating strength for Constellation Brands. In first-quarter fiscal 2027, beer net sales increased 2% to $2.28 billion, supported by $40.7 million of shipment volume growth and $17.6 million of pricing gains. Shipments rose 1.8%, while depletions slipped 0.3% in a volatile consumer backdrop.
The brand mix still matters. Modelo Especial and Corona Extra faced declines, but Pacifico, Victoria and Modelo Chelada delivered gains that helped support the portfolio. Management continues to emphasize consumer insights, occasion-based marketing and disciplined investment as it works to keep scaled brands relevant.
Anheuser-Busch InBev SA/NV BUD provides a useful beer benchmark because it also competes through a broad global portfolio and event-driven marketing. Its presence highlights how large brewers are pushing premium, non-alcoholic and occasion-led offerings to defend share.
Constellation Brands Inc Price, Consensus and EPS Surprise
Margins Reflect Relief and New Cost Pressures
Constellation Brands’ margin story is not one-dimensional. Consolidated gross profit as a percentage of net sales rose to 54.3% in the first quarter from 50.4% a year earlier. Comparable operating income increased to $834.2 million from $809.9 million.
Beer operating margin was 39.0%, nearly flat with 39.1% in the prior-year period. Fixed cost absorption and pricing helped, but higher materials costs, tariffs, unfavorable product mix and marketing spending limited expansion. Tariffs tied largely to aluminum imports totaled $13.0 million, and marketing as a percentage of beer net sales is expected to rise above 10% in the second and third quarters to support major sports activations.
Wine and Spirits Remain a Drag
The Wine and Spirits segment shows why Constellation’s alcohol exposure is still uneven. Segment net sales fell 47% year over year to $149.2 million in the first quarter, mainly because $142 million of sales from the 2025 Wine Divestitures were no longer in the business.
The organic view was better, with wine and spirits organic net sales up 8%, organic shipments up 7.7% and depletions up 6.6%. Still, the segment reported a comparable operating loss of $1.1 million, and fiscal 2027 organic net sales are expected to range from down 1% to up 1%. Diageo plc DEO, with its large spirits, beer and wine portfolio, remains a relevant peer for investors tracking premiumization and pressure across global beverage alcohol.
Cash Flow and Capital Returns Add Support
Constellation Brands continues to generate cash while funding brand investment, brewery projects and capital returns. Net cash provided by operating activities was $661.8 million in the first quarter, compared with $637.2 million in the prior-year period.
The company repurchased 1.5 million Class A shares for $223.8 million during the quarter and another 714,387 shares for $100 million after quarter end. As of June 26, 2026, $2.75 billion remained available for future repurchases. The board also declared a quarterly dividend of $1.03 per Class A share.
What Should Investors do With STZ Now?
The bottom line is that STZ is tracking the right alcohol themes in premium beer, non-alcohol offerings and portfolio reshaping, but the near-term setup is constrained by soft consumer demand and margin pressure. Fiscal 2027 guidance still calls for enterprise organic net sales growth in a range of down 1% to up 1%, underscoring limited visibility.
Image Source: Zacks Investment Research
STZ currently carries a Zacks Rank #4 (Sell). That rank signals pressure from earnings estimate trends, so investors may want to be selective despite the company’s brand strength and cash generation.
The stock has a Value Score of B, Growth Score of C, Momentum Score of B and VGM Score of B. The B grades show favorable value and momentum characteristics, but Style Scores are designed to complement the Zacks Rank, not override it. For now, STZ looks like a stock with solid assets but a cautious earnings setup.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

STZ Stock Tracks Key Alcohol Trends in Demand and Margins

Constellation Brands, Inc. STZ presents investors with a familiar market question. A cheaper valuation can signal opportunity, but it can also reflect real pressure on earnings visibility and demand.
STZ’s premium beer portfolio remains the main support. Yet the stock’s recent underperformance, soft guidance and wine and spirits reset keep the value case from looking clean.
The Valuation Case for STZ
STZ trades at 10.97X forward 12-month earnings, below the Zacks sub-industry at 14.97X, the Consumer Staples sector at 17.1X and the S&P 500 at 21.2X. The discount is also steep relative to the stock’s five-year median multiple of 18.6X.
Shares are down 5.3% year to date and 23.4% over the trailing 12 months. That decline has pushed the stock close to the lower end of its five-year valuation range, which runs from 10.5X to 22.6X.
The company’s earnings base still has support. In first-quarter fiscal 2027, comparable earnings of $3.43 per share increased 7% year over year and beat the Zacks Consensus Estimate of $3.22.
Net sales declined 3% to $2.433 billion, but organic net sales increased 3%. That mix of reported pressure and organic improvement helps explain why the stock looks inexpensive but not without complications.
Constellation Brands Inc Price and EPS Surprise
Beer Remains the Core Support
The Beer segment generated about 93.8% of consolidated net sales in the first quarter of fiscal 2027. Its imported portfolio, anchored by Modelo Especial, Corona Extra, Pacifico and Victoria, remains central to STZ’s investment case.
Beer net sales rose 2% to $2.28 billion, backed by 1.8% shipment growth and favorable pricing. Depletions slipped only 0.3% in a volatile consumer backdrop, as gains from Pacifico, Victoria and Modelo Chelada helped offset declines in Modelo Especial and Corona Extra.
Anheuser-Busch InBev SA/NV BUD remains a relevant peer because it competes across global and local beer brands, including Budweiser, Michelob ULTRA and Stella Artois. Its scale highlights the competitive intensity facing STZ in premium beer and adjacent drinking occasions.
Molson Coors Beverage Company TAP is another useful comparison in beer, with brands such as Coors Light, Miller Lite, Blue Moon and Miller High Life. Its broad portfolio reinforces how shelf space, price-pack architecture and consumer occasions remain important battlegrounds.
The Warning Signs Behind the Discount
STZ’s cheaper multiple reflects more than broad market weakness. Management still expects fiscal 2027 enterprise organic net sales growth to range from a 1% decline to a 1% gain, with the same range projected for both Beer and Wine and Spirits organic net sales.
The Wine and Spirits business remains a drag. Segment net sales fell 47% year over year to $149.2 million in the first quarter, mainly because sales from divested assets were no longer part of the business.
Organic trends were better, with wine and spirits organic net sales up 8%, organic shipments up 7.7% and depletions up 6.6%. Still, the segment posted a comparable operating loss of $1.1 million, showing that the portfolio reset needs time to translate into better profitability.
Margin risks also remain visible. Beer operating margin was 39.0%, nearly flat with 39.1% in the prior-year period, as benefits from pricing and fixed cost absorption were partly offset by higher materials costs, tariffs, unfavorable product mix and increased spending.
What Investors Should Watch Now
The bottom line is that STZ has the traits of a value candidate, but the discount comes with operating caveats. Beer strength, cash generation and portfolio reshaping support the case, while weak demand visibility, wine and spirits transition costs and margin pressure explain the market’s caution.
The stock currently carries a Zacks Rank #4 (Sell), along with a Value Score of B, Growth Score of C, Momentum Score of B and VGM Score of B. The Value Score suggests the stock screens well on valuation characteristics, while the Growth Score points to a more mixed growth profile.
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
The Style Scores are designed to complement the Zacks Rank rather than replace it. For STZ, favorable Value and Momentum Scores are offset by the weaker Rank, which reflects a less favorable near-term earnings estimate revision backdrop. That makes the stock one to monitor carefully rather than a straightforward bargain.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Is STZ Stock a Value Play or a Warning Sign for Investors?

Constellation Brands STZ remains a beer-led investment story, with its outlook tied to how well its imported portfolio offsets uneven demand.
Premium beer brands continue to provide scale and pricing power. Still, weak Wine and Spirits results, tariff pressure and cautious fiscal 2027 guidance keep the stock balanced.
Beer Remains the Core Growth Driver
Beer accounted for about 93.8% of consolidated net sales in the first quarter of fiscal 2027, underscoring how central this segment is to Constellation’s earnings base. Beer net sales rose 2% to $2.28 billion, helped by shipment volume growth and pricing gains.
Shipments increased 1.8%, while depletions slipped just 0.3% despite a volatile consumer backdrop. Modelo Especial and Corona Extra were soft, but Pacifico, Victoria and Modelo Chelada brands posted gains. That mix matters as management works to rebuild relevance for scaled names.
Capacity spending also keeps the beer outlook in focus. The company is investing in brewery projects at Nava, Obregón and Veracruz to support future demand and improve operating flexibility. Beer capital expenditures were $164.3 million in the quarter.
Anheuser-Busch InBev BUD, the world’s largest brewer, remains a useful comparison for investors watching premium beer demand and brand execution. Molson Coors Beverage Company TAP also offers context as value, pack architecture and category traffic remain competitive variables.
Constellation Brands Inc Price and Consensus
Wine and Spirits Reset Still Weighs
Constellation’s Wine and Spirits business remains the main drag. First-quarter segment net sales fell 47% year over year to $149.2 million, mainly because $142 million of sales from divested assets were no longer included after the 2025 Wine Divestitures.
The smaller portfolio showed better underlying movement. Organic net sales rose 8%, organic shipments increased 7.7% and depletions grew 6.6%. Gains for brands such as Kim Crawford and Mi CAMPO Tequila suggest that the higher-end portfolio still has consumer appeal, but profitability is still under repair.
The segment reported a comparable operating loss of $1.1 million in the quarter. Tariffs, retaliatory tariffs and actions in certain international markets also pressured branded wine and spirits shipment volume.
Margins, Cash Flow and Guidance Set the Near-Term Tone
Constellation’s first-quarter comparable earnings of $3.43 per share rose 7% year over year and topped the Zacks Consensus Estimate of $3.22. Net sales declined 3% to $2.433 billion but exceeded the consensus mark of $2.404 billion.
Beer operating income increased 2% to $891.4 million, but beer operating margin was nearly flat at 39.0%. Pricing, fixed cost absorption and savings helped, while higher materials costs, aluminum tariffs, product mix and marketing spending limited expansion.
Operating cash flow was $661.8 million in the first quarter. Management still expects fiscal 2027 operating cash flow of $2.4-$2.5 billion and free cash flow of $1.6-$1.7 billion.
Still, the outlook is cautious. Constellation projects enterprise organic net sales and beer net sales between a 1% decline and a 1% increase in fiscal 2027. That range reflects limited visibility as consumers respond to inflation, fuel prices and tighter discretionary income.
Image Source: Zacks Investment Research
Bottom Line for STZ Investors
Constellation’s stock outlook depends on beer execution. The segment has the brands, pricing and capacity investment to support the long-term case, but demand remains uneven and the Wine and Spirits reset is not yet contributing enough to change the broader tone.
STZ currently carries a Zacks Rank #4 (Sell).
You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.
It has a Value Score of B, Growth Score of C, Momentum Score of B and VGM Score of B. The Style Scores point to favorable value and momentum characteristics, while the VGM Score suggests a reasonably balanced style profile. However, the Zacks Rank remains the primary stock-selection signal because it reflects earnings estimate revisions. A Zacks Rank #4 indicates a more cautious earnings-revision setup, even when some Style Scores are favorable.
Research Chief Names "Single Best Pick to Double"
From thousands of stocks, 5 Zacks experts each have chosen their favorite to skyrocket +100% or more in months to come. From those 5, Director of Research Sheraz Mian hand-picks one to have the most explosive upside of all.
This company targets millennial and Gen Z audiences, generating nearly $1 billion in revenue last quarter alone. A recent pullback makes now an ideal time to jump aboard. Of course, all our elite picks aren’t winners but this one could far surpass earlier Zacks’ Stocks Set to Double like Nano-X Imaging which shot up +129.6% in little more than 9 months.
Free: See Our Top Stock And 4 Runners Up
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Constellation Brands Stock Outlook Hinges on Beer Strength

Players in the Zacks Beverages – Alcohol industry are navigating a period of structural change as evolving consumer preferences and cost pressures reshape the competitive landscape. Moderation trends, particularly among younger and health-conscious consumers, are weighing on long-term demand for traditional beer, wine and spirits, creating concerns over sustainable volume growth. At the same time, tariffs and elevated costs for packaging, freight, labor and agricultural inputs are pressuring margins, especially for companies with global supply chains and limited pricing power.
However, the industry also offers meaningful growth opportunities through innovation. Expanding demand for ready-to-drink cocktails, and low and no-alcohol beverages is creating revenue streams, while companies that diversify their portfolios and adapt to changing consumption habits are better positioned to offset volume headwinds. For investors, success will likely depend on companies' ability to balance pricing power, cost discipline and product innovation while capitalizing on evolving consumer preferences. Leading players, including Anheuser-Busch InBev BUD, Diageo Plc DEO, Constellation Brands Inc. STZ, Brown-Forman Corporation BF.B and Molson Coors Beverage Company TAP, look well-placed to capitalize on these trends.
About the Industry
The Zacks Beverages – Alcohol industry mainly comprises producers, importers, exporters, marketers and sellers of alcoholic beverages like beer, craft beer, ciders, wine, rum, whiskey, liqueurs, vodka, tequila, champagnes, brandy, amaretto, ready-to-drink (RTD) cocktails and malt. Some industry players also produce and sell non-alcoholic beverages like carbonated soft drinks, sparkling waters, bottled water, energy drinks, powdered and natural juices, and RTD teas. The companies sell products through wholesalers and retailers like supermarkets, warehouse clubs, grocery stores, convenience stores, package stores, drug stores and other retail outlets. The industry participants also sell beer directly to consumers in cans and bottles at restaurants, pubs, bars and liquor stores. Some brewers operate brewpubs or tasting rooms at breweries, offering consumers the freshest beer.
What's Shaping the Future of Beverages - Alcohol Industry
Moderation Trend Pressure Alcohol Consumption: Moderation is becoming a structural headwind for alcohol companies. Younger consumers, particularly Gen Z, are drinking less, and health-conscious buyers across age groups increasingly favor balanced lifestyles. Consumers are shifting occasions away from traditional alcohol, and low or no-alcohol alternatives are gaining share. For investors, this raises concern over long-term volume growth across beer, wine and spirits. Even if pricing supports revenues, weaker consumption can limit operating leverage and make growth more dependent on innovation. Companies with high exposure to legacy alcohol categories may face slower depletion trends, higher promotional needs and weaker earnings visibility if moderation continues to reshape drinking behavior.
Tariffs Could Squeeze Margins: Tariffs are emerging as a meaningful overhang for U.S. beverage alcohol companies with global sourcing and international supply chains. Higher duties on imported glass bottles, aluminum, packaging materials and select beverage imports can raise input costs, forcing producers to either absorb the increase or pass it on to consumers. While premium brands have greater pricing flexibility, mass-market labels remain more vulnerable to demand erosion from higher shelf prices. Investors should watch for margin pressure, procurement disruptions and slower earnings growth, particularly among companies with significant import exposure or limited domestic sourcing capabilities.
Beyond tariffs, alcohol producers continue to navigate elevated costs across packaging, freight, labor and agricultural inputs. Although inflation has moderated from peak levels, cost volatility remains a key earnings risk, especially if companies are unable to fully offset higher expenses through pricing. Promotional activity may also increase as consumers become more value-conscious, pressuring the gross margin.
Innovation Beyond Traditional Alcohol Creates Growth Runway: Despite softer industry volumes, beverage companies are unlocking growth opportunities through innovation. Demand for ready-to-drink cocktails continues to outpace most traditional alcohol categories as consumers seek convenience, flavor variety and affordability. At the same time, low and no-alcohol beverages are evolving into a meaningful profit pool rather than a niche offering, attracting consumers who want moderation without abandoning social drinking. Leading brewers and spirits companies are expanding product portfolios to address these changing occasions, allowing them to capture incremental demand instead of relying solely on traditional alcohol consumption. Successful innovation could offset category pressures and strengthen long-term market positioning.
Zacks Industry Rank Indicates Dull Prospects
The Zacks Beverages – Alcohol industry is a 17-stock group within the broader Zacks Consumer Staples sector. The industry currently carries a Zacks Industry Rank #189, placing it at the bottom 23% of more than 250 Zacks industries.
The group’s Zacks Industry Rank, which is basically the average of the Zacks Rank of all the member stocks, indicates dull near-term prospects. Our research shows that the top 50% of the Zacks-ranked industries outperform the bottom 50% by a factor of more than 2 to 1.
The industry’s positioning in the bottom 50% of the Zacks-ranked industries is a result of a negative earnings outlook for the constituent companies in aggregate. Looking at the aggregate earnings estimate revisions, it appears that analysts are gradually losing confidence in this group’s earnings growth potential.
Before we present a few stocks that you may want to consider for your portfolio, let us take a look at the industry’s recent stock-market performance and valuation picture.
Industry Underperforms S&P 500
The Zacks Beverages – Alcohol industry has outperformed the broader sector and underperformed the S&P 500 in the past year.
The stocks in the industry have collectively returned 4.1% in the past year, whereas the Zacks Consumer Staples sector has risen 1.6%. Meanwhile, the Zacks S&P 500 composite has rallied 23.9%.
1-Year Price Performance
Beverages - Alcohol Industry's Valuation
Based on the forward 12-month price-to-earnings (P/E) ratio, commonly used to value Consumer Staples stocks, the industry is currently trading at 15.27X compared with the S&P 500’s 21.07X and the sector’s 17.26X.
Over the last five years, the industry traded as high as 24.1X, as low as 13.77X and at the median of 18.39X, as the chart below shows.
Price-to-Earnings Ratio (Past 5 Years)
5 Alcohol Beverages Stocks to Keep a Close Eye on
None of the stocks in the Zacks Beverages – Alcohol space currently sports a Zacks Rank #1 (Strong Buy) or a Zacks Rank #2 (Buy). However, we have selected five stocks with a Zacks Rank #3 (Hold) to watch from the same industry. You can see the complete list of today’s Zacks #1 Rank stocks here.
Let us have a look at the companies.
Anheuser-Busch InBev: Also known as AB InBev, this is a global brewing leader with a portfolio of iconic brands spanning diverse geographies. Its leading positions across key markets and expansive global footprint provide meaningful scale advantages, enabling efficient operations and the ability to grow multi-country brands worldwide. The company continues to benefit from resilient consumer demand for its core brands, supported by strong business momentum, driven by disciplined execution, sustained brand investment and an accelerated digital transformation agenda. Premiumization remains a central growth lever, as consumers increasingly trade up within the beer category.
Beyond core beer, AB InBev is steadily expanding its Beyond Beer portfolio, encompassing ready-to-drink offerings, such as canned wines and cocktails, along with hard seltzers, ciders and flavored malt beverages. This diversification strategy is enhancing relevance across occasions and consumer segments, while providing an incremental growth runway and supporting top-line momentum. The Zacks Consensus Estimate for AB InBev’s 2026 sales and earnings suggests growth of 8.4% and 15.8% from the year-ago period’s reported figures. The consensus mark for the company’s 2026 earnings has moved down by a penny in the past seven days. The Zacks Rank #3 stock has gained 15.8% in the past year.
Price & Consensus: BUD
Diageo: The stock of this London-based leading beverage company has declined 22.4% in the past year. DEO operates in approximately 180 countries, and is involved in producing, distilling, brewing, bottling, packaging and distributing spirits, wine and beer. The company continues to place innovation and consumer moderation at the center of its long-term growth strategy, addressing evolving consumption patterns and diversifying its portfolio. Innovation remains a key driver, with strong momentum across tequila, whisky, beer and RTD formats.
Equally important is Diageo’s push into moderation, wherein it has established clear leadership in non-alcoholic spirits. The company is refining its $2-billion productivity program to drive efficiency across the business while ensuring long-term sustainable growth. A key focus is balancing cost savings with strategic reinvestment, particularly in marketing and brand activation. The Zacks Consensus Estimate for Diageo’s fiscal 2027 EPS has edged down 0.3% in the past 30 days. The consensus estimate for fiscal 2027 sales and earnings suggests declines of 1.4% and 1.8%, respectively, from the year-ago period’s reported figures. The company currently has a Zacks Rank #3.
Price & Consensus: DEO
Constellation Brands: The Victor, NY-based third-largest beer company and a leading, high-end wine company in the United States continues to benefit from a sharp focus on brand building and a steady cadence of innovation. The company’s premiumization strategy remains a key growth driver, led by the sustained strength of the Modelo and Corona brand families and continued traction across its Power Brands portfolio. Its beer business is benefiting from premium and above-premium trends, supported by growth in traditional beer and adjacent categories, such as flavored beer, seltzers, RTD spirits and flavored malt beverages.
STZ is actively investing to extend the momentum of its Power Brands, aligning innovation with evolving consumer preferences and delivering successful product launches. Meanwhile, the company’s digital momentum continues to build through platforms, such as Instacart, Drizly and retailer-owned channels, reflecting consumers’ growing preference for convenience-driven purchasing. The Zacks Consensus Estimate for STZ’s fiscal 2027 earnings per share has moved down 0.2% in the past seven days. The consensus estimate for fiscal 2027 earnings suggests a decline of 0.2% from the year-ago period’s reported figure. The Zacks Rank #3 stock has lost 23.4% in the past year.
Price & Consensus: STZ
Brown-Forman: Based in Louisville, KY, this is a global spirits company that manufactures, distills, bottles, imports, exports, markets and sells a broad portfolio of premium alcoholic beverages. The company’s growth strategy is anchored in premiumization, with a clear focus on high-quality, premium and super-premium spirits that support brand equity and margin resilience. The portfolio has been streamlined around core power brands such as Jack Daniel’s and Woodford Reserve, complemented by successful additions like the Jack Daniel’s and Coca-Cola RTD, and the integration of super-premium labels Gin Mare and Diplomático.
Emerging markets continue to provide a strong growth offset, driven by rising middle-class demand and momentum across the Jack Daniel’s family. Disciplined pricing, innovation, distribution evolution and tighter cost-control underpin long-term value creation despite near-term pressures. The Zacks Consensus Estimate for BF.B’s fiscal 2027 sales and earnings suggests growth of 0.4% and 11.8%, respectively, from the year-ago period’s reported figures. The consensus mark for the Zacks Rank #3 company’s fiscal 2026 earnings has moved up 1.8% in the past 30 days. BF.B has declined 9.5% in the past year.
Price & Consensus: BF.B
Molson Coors: The stock of this Chicago, IL-based leading beverage company has declined 21.3% in the past year. TAP is on track with its revitalization plan, focused on achieving sustainable top-line growth by streamlining its organization and reinvesting resources into its brands and capabilities. Investments, partnerships and product launches, which are part of its revitalization plan, have been aiding the company.
Molson Coors has been committed to increasing its market share through innovation and premiumization. Intending to accelerate portfolio premiumization, TAP has been aggressively growing its above-premium portfolio in the past few years. The Zacks Consensus Estimate for Molson Coors’ 2026 EPS has been unchanged in the past 30 days. The consensus estimate for the Zacks Rank #3 company’s 2026 sales and earnings suggests declines of 0.1% and 11.4%, respectively, from the year-ago period’s reported figures.
Price & Consensus: TAP
7 Best Stocks for the Next 30 Days
Just released: Experts distill 7 elite stocks from the current list of 220 Zacks Rank #1 Strong Buys. They deem these tickers "Most Likely for Early Price Pops."
Since 1988, the full list has beaten the market more than 2X over with an average gain of +23.9% per year. So be sure to give these hand picked 7 your immediate attention.
See them now >>
Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

5 Alcohol Stocks to Watch Amid Changing Consumer Preferences

The S&P 500 Index ($SPX) (SPY) on Monday closed up +0.72%, the Dow Jones Industrial Average ($DOWI) (DIA) closed up +0.29%, and the Nasdaq 100 Index ($IUXX) (QQQ) closed up +1.26%. September E-mini S&P futures (ESU26) rose +0.82%, and September E-mini Nasdaq futures (NQU26) rose +1.35%.
Stock indexes settled higher on Monday, with the S&P 500 posting a 2.5-week high and the Dow Jones Industrials posting a new all-time high. Strength in chipmakers, AI infrastructure stocks, and megacap technology companies lifted the overall market on Monday. Stocks also found support in Monday’s US economic news, which showed service sector activity continued to expand in June, albeit at a slower pace, as companies boosted payrolls amid easing cost pressures.
Join 200K+ Subscribers: Find out why the midday Barchart Brief newsletter is a must-read for thousands daily.
The US Jun ISM services index fell -0.5 to 54.0, right on expectations. The Jun ISM services price-paid sub-index eased to 67.7 from 71.3 in May, stronger than the 67.5 expected. The Jun ISM services employment sub-index rose +3.3 to 51.2, stronger than expectations of 48.2.
Stocks and bonds also have carryover support from last Thursday’s smaller-than-expected increase in US nonfarm payrolls, which bolstered speculation that the Fed will not raise interest rates anytime soon.
The outlook for strong Q2 earnings is a bullish factor for stocks. Forecasts compiled by Bloomberg Intelligence suggest Q2 earnings may increase by +23%, close to Q1’s blowout earnings of +30%, which was more than double the +12% analysts had expected. AI spending is expected to account for most of earnings, with AI infrastructure stocks set to contribute nearly 60% of the S&P 500's earnings-per-share growth in Q2.
WTI crude oil (CLQ26) fell -0.2% on Monday as Saudi Arabia and the United Arab Emirates ramped up shipments to nearly pre-war levels. Also, OPEC+ on Sunday agreed to add 188,000 bpd to their output target, beginning August 1, in line with plans to complete the reversal of production curbs imposed a few years ago.
The markets are discounting a 25% chance of a +25 bp rate hike at the next FOMC meeting on July 28-29.
Overseas stock markets settled lower on Monday. The Euro Stoxx 50 fell from a new record high and closed down -0.23%. China's Shanghai Composite closed down -0.06%. Japan's Nikkei-225 Stock Average closed down -0.01%.
Interest Rates
September 10-year T-notes (ZNU6) on Monday closed up +2 ticks, and the 10-year T-note yield fell -0.6 bp to 4.477%. Sep T-notes posted modest gains on Monday amid carryover support from last Thursday’s weaker-than-expected US June payroll report, which reduces the chances of the Fed tightening monetary policy. Lower crude oil prices on Monday were also supportive of T-note prices.
Gains in T-notes were muted on Monday after the June ISM Services index expanded as expected, with the employment sub-index climbing, a hawkish factor for Fed policy. Strength in stocks on Monday also curbed safe-haven demand for T-notes. In addition, supply pressures are weighing on T-notes, as the Treasury will auction $119 billion in T-notes and T-bonds this week, beginning with a $58 billion auction of 3-year T-notes on Tuesday.
European government bond yields moved higher on Monday. The 10-year German bund yield climbed to a 2-week high of 2.949% and finished up +1.3 bp to 2.948%. The 10-year UK gilt yield rose +1.1 bp to 4.793%.
Eurozone May retail sales rose +0.2% m/m, weaker than expectations of +0.3% m/m.
The Eurozone July Sentix investor confidence index rose by +10.3 to a 4-month high of -3.1, stronger than expectations of -10.0.
German May factory orders rose +1.9% m/m, stronger than expectations of +1.1% m/m.
Swaps are discounting a 3% chance of a +25 bp ECB rate hike at its next policy meeting on July 23.
US Stock Movers
Chipmakers and AI infrastructure stocks moved higher on Monday, helping lift the overall market. The iShares Semiconductor ETF (SOXX) closed up more than +2%. Western Digital (WDC) closed up more than +7% to lead gainers in the Nasdaq 100, and Advanced Micro Devices (AMD) closed up more than +6%. Also, Seagate Technology Holdings Plc (STX) and Qualcomm (QCOM) closed up more than +5%, and ON Semiconductor (ON) closed up more than +4%. In addition, Microchip Technology (MCHP), Analog Devices (ADI), and ASML Holding NV (ASML) closed up more than +3%, and NXP Semiconductors NV (NXPI) and ARM Holdings Plc (ARM) closed up more than +2%.
Most of the Magnificent Seven technology stocks gained on Monday, a supportive factor for the broader market. Tesla (TSLA) closed up more than +6%, and Meta Platforms (META) closed up more than +2%. Also, Alphabet (GOOGL) and Apple (AAPL) closed up more than +1%, Amazon.com (AMZN) closed up +0.61%, and Nvidia (NVDA) closed up +0.40%. However, Microsoft (MSFT) bucked the trend and closed down -0.96% after announcing that its Xbox division plans to eliminate 3,200 jobs, or 20% of its workforce, over the next year.
Cybersecurity stocks rallied on Monday, a positive factor for the overall market. Okta (OKTA) closed up more than +5%, and Fortinet (FTNT) closed up more than +3%. Also, CrowdStrike Holdings (CRWD), Palo Alto Networks (PANW), Zscaler (ZS), and Cloudflare (NET) closed up more than +2%.
Dell Technologies (DELL) closed up more than +4% after President Trump posted positive comments about the company on social media.
Axon Enterprise (AXON) closed up more than +4% after Needham & Co raised its price target on the stock to $750 from $600.
Macy’s (M) closed up more than +2% after Morgan Stanley upgraded the stock to overweight with a price target of $30.
US Bancorp (USB) closed up more than +2% after Jeffries upgraded the stock to buy from hold with a price target of $75.
ZIM Integrated Shipping Services Ltd (ZIM) closed down more than -7% after Ynet reported that Israeli Prime Minister Netanyahu said the proposed sale of the company is “not on the agenda.”
O’Reilly Automotive (ORLY) closed down more than -6% to lead losers in the S&P 500 following last Thursday’s report that the company was interested in acquiring Genuine Parts Co’s auto-parts segment.
Constellation Brands (STZ) closed down more than -4% after Morgan Stanley said it sees potential Q3 demand risk for beer sales following Brazil’s and Mexico’s defeat in the World Cup on Sunday.
Brown & Brown (BRO) closed down -2% after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $55.
JB Hunt Transport Services (JBHT) closed down more than -2% after Morgan Stanley downgraded the stock to underweight from equal weight with a price target of $200.
Earnings Reports(7/7/2026)
Enerpac Tool Group Corp (EPAC), Enovix Corp (ENVX), Kura Sushi USA Inc (KRUS), MarketAxess Holdings Inc (MKTX), Penguin Solutions Inc (PENG).
On the date of publication, Rich Asplund did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
More news from Barchart
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Constellation Brands, Inc.

Trend

Trend Class

Trend Power

Pattern

EMA

EMA-20

EMA-50

EMA-100

EMA-20

EMA-50

EMA-100

Oscillators

Stochastic

RSI

MACD

Candle pattern type