RBC Capital analysts released their outlook on Constellation Brands, Inc. (NYSE:STZ) ahead of the company’s upcoming Q1 earnings, which are expected to be reported on June 30, 2022.
The analysts estimate total Q1 net sales of $2.17 billion (vs. Street’s $2.16 billion) and EPS (ex-Canopy) of $2.78 (vs. Street’s $2.68). The analysts estimate solid beer depletions growth of 8% year-over-year (vs Street’s 7.2%), implying 2-year average growth of 9.4%, compared to 8.2% in the prior four quarters.
On beer margins, the analysts expect year-over-year pressure due to commodity/transportation costs and incremental depreciation, but note that the company is well hedged for 2023.
Overall, the analysts expect margin pressure to be more than offset by revenue upside. They maintain their outperform rating and $300 price target on the company’s shares.