Constellation Brands Stock: Buy, Sell, or Hold?

Core Viewpoint - Constellation Brands has experienced a significant decline in stock price, down approximately 37% from its 52-week high, attributed to weak sales trends and potential impacts from trade tariffs [1][6]. Group 1: Company Overview - Constellation Brands is a leading player in the beer market, holding exclusive rights to market and sell Corona and Modelo in the U.S. and is also one of the largest wine producers globally [3]. - The company is facing challenges due to the Trump administration's potential 25% tariff on Mexican imports, which could increase costs and impact earnings [4]. Group 2: Financial Performance - In the last reported fiscal third quarter, net sales growth and adjusted earnings per share (EPS) were flat year over year, reflecting weaker consumer spending in a tough economic environment [6]. - The stock is currently trading at a forward price-to-earnings (P/E) ratio of 12 times its consensus 2025 EPS, with a dividend yield of 2.4%, above the five-year average of 1.5% [10]. Group 3: Investment Sentiment - Despite current challenges, Constellation Brands remains profitable with a strong market position and loyal consumer base, as evidenced by Modelo becoming the top-selling beer in the U.S. in 2023 [7]. - Berkshire Hathaway recently invested $1.2 billion in Constellation Brands, acquiring 5.6 million shares, indicating confidence in the company's fundamentals [8][9]. - The stock's recent sell-off may have already priced in worst-case scenarios, suggesting potential for recovery and long-term investment opportunities [11][12].