Jim Cramer on Constellation Brands: “The Company Has Fallen Out of Grace”

Constellation Brands, Inc. (NYSE:STZ) is one of the stocks in Jim Cramer’s game plan for this week. Cramer started his game plan with the stock, as he remarked:

“Monday, Constellation Brands, STZ, reports. The company has fallen out of grace along with the rest of the alcohol plays. CEO Bill Newlands acknowledged on the last earnings call that the company is being impacted by ICE raids in popular shopping destinations. The declining volumes has matched the decline in the stock. Constellation has been trying to bounce of late. At 12 times earnings, it’s the cheapest I’ve ever seen it, but the multiple contraction seems justified given the company’s recent track record as well as the rise of GLP-1s, which reduce craving for everything, including alcohol.”

Pixabay/Public Domain

Constellation Brands, Inc. (NYSE:STZ) produces and markets beer, wine, and spirits under brands such as Corona, Modelo, Robert Mondavi, Kim Crawford, and SVEDKA. During the June 27 episode, Cramer called it a “fallen idol,” as he commented:

“On Tuesday, we get results from former market darling, Constellation Brands. What a fallen idol. There’s so much to unpack here because this consumer packaged goods company is a microcosm of what’s gone wrong with this now pathetic group that used to be the place to go when there’s a slowdown. First: Constellation is an alcohol company, so all their products are being hurt by the GLP-1 drugs, which can blunt your craving for booze. That’s especially true for the big beers, which are Modelo [and] Corona, and then a new popular favorite, Pacifico.

Story Continues

While we acknowledge the potential of STZ as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

Disclosure: None. This article is originally published at Insider Monkey.

View Comments