Jefferies analysts started coverage on Constellation Brands (NYSE:STZ) with a Buy rating, setting a price target of $292.00. The analysts noted that despite significant developments within the company, Constellation Brands’ stock price hasn’t reflected these changes.
The company has experienced growth and established a viable plan for future progress. Its beer brands are performing well, with successful innovations and an anticipated increase in distribution.
The analysts highlighted the management’s commitment to prudent capital use, facilitated by the new share structure. Despite these positives, STZ shares are trading at 14x, below their historical 16x EV/EBITDA multiple. The analysts anticipate this valuation discrepancy to change, leading to the initiation of the Buy rating.