STZ
Constellation Brands, Inc.
$132.44
Stable Earnings Power
80%
P/Adj-EPS × Normalized Multiple
Moderate
·
Conviction
Undervalued
Trading 36.1% below fair value
You pay
$132.44
Bear
$177.55
Fair
$207.14
Bull
$236.74
Bear
$177.55
+34.1%
$10.71 × 18x P/E
Fair
$207.14
+56.4%
$10.71 × 21x P/E
Bull
$236.74
+78.8%
$10.71 × 24x P/E
Key Value Driver
Normalized P/E multiple (21x base case)
Implied Market Multiple
12.4x
Summary
Our base-case estimate uses a valuation based on adjusted earnings per share and a normalized price-to-earnings multiple. We then blend that result with the average analyst price target of $165.90 from 46 analysts, using a 30% weight on analyst consensus. That produces an estimated intrinsic value of $207.14 per share.
Warnings
Wall Street's average price target is $165.90 (from 46 analysts). Our estimate is 36% above the consensus -- consider that gap carefully.
Key Risks
- Growth DCF inappropriate — terminal value assumptions dominate
- EV/EBITDA misleading for regulated businesses where capex is mandated
- Regulatory risk is a fat tail not visible in normal multiples