Constellation Brands (NYSE:STZ) Quarterly Earnings Preview

• Constellation Brands is expected to report an EPS of $3.39 and revenue of $2.56 billion for the quarter.

• The company faces challenges with expected declines in earnings due to lower revenues, particularly in its wine and spirits divisions.

• Financial ratios such as a price-to-sales ratio of 2.8 and a debt-to-equity ratio of 1.76 highlight potential valuation and leverage concerns.

Constellation Brands, listed as NYSE:STZ, is a leading beverage company known for its diverse portfolio of wine, liquor, and beer products. The company is set to release its quarterly earnings on July 1, 2025. Analysts expect an earnings per share (EPS) of $3.39 and revenue of approximately $2.56 billion. These figures will be closely watched by investors and analysts alike.

Despite the anticipated EPS, Constellation Brands faces challenges. The company is expected to report a decline in earnings for the quarter ending May 2025, primarily due to lower revenues. This outlook is supported by the Zacks Consensus Estimate, which aligns with Wall Street's expectations. The company's beer segment remains its primary growth driver, but guidance has been lowered due to macroeconomic challenges.

The wine and spirits divisions are experiencing double-digit revenue declines, with little evidence of a turnaround. This has led to a maintained Hold rating for the company. The stock's near-term price movement will likely depend on how the actual earnings compare to the estimates. If Constellation Brands exceeds expectations, the stock may rise; if it falls short, the stock could decline.

Financially, Constellation Brands has a price-to-sales ratio of approximately 2.8, indicating the market values its sales at nearly three times its revenue. The enterprise value to sales ratio is about 4, suggesting a higher valuation when considering debt and cash. However, the company has a debt-to-equity ratio of approximately 1.76, indicating significant debt usage compared to equity.

The company's current ratio is about 0.92, suggesting potential challenges in covering short-term liabilities with short-term assets. Additionally, the negative P/E ratio and earnings yield indicate current losses. The upcoming earnings call will be crucial in determining the sustainability of any immediate price changes and future earnings expectations.