UBS Ups Constellation Brands Outlook
UBS Warburg raised its estimates on Constellation Brands (STZ ).
Analyst Caroline Levy says fourth quarter results were impressive, significantly exceeding her estimates. She notes the fine wines unit posted strong fourth quarter growth despite a weak economy, and she thinks sales can grow 7%-8%, with profits near 15%-20%, over the next three to five years.
Levy doesn't think the shares reflect the value of its fundamentals; shares are trading at only 9.9 times her calendar 2003 earnings per share estimates. She raised the $2.33 fiscal 2004 (Feb.) EPS estimate to $2.43.
Levy has a $30 12-month target, and thinks the stock is substantially undervalued, and rates the shares as buy.
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