UBS Warburg Ups Constellation Brands to 'Strong Buy'
UBS Warburg upgraded Constellation Brands (STZ ) to strong buy from buy.
Analyst Caroline Levy says her upgrade is based on valuation and strong first quarter earnings per share. She says first quarter operating profit rose 23% vs. her 7% forecast on strength in high margin businesses, and a hike in Corona prices. She believes the company has superior growth prospects and a diversified business model. She expects the company's base business to deliver 6% sales growth, 10% operating profit growth, and 15% or better EPS growth over the long term. He raised his $2.02 fiscal 2003 (Feb.) EPS estimate to $2.05, and upped the $2.23 fiscal 2004 estimate to $2.35. Levy maintains her $35 12-month target.