Zacks Investment Research downgraded shares of Constellation Brand, Inc. (STZ) from OUTPERFORM to NEUTRAL on January 27, 2014, with a target price of $80.00.
Though Constellation Brands posted strong overall third-quarter fiscal 2014 results, we are skeptical about the company's future performance due the distressed results at its wine and spirit segment. Moreover, we remain apprehensive of the wine and spirit segment's future given the disappointing operating income projection for the segment. Thus, we have downgraded our long-term recommendation on the stock to Neutral. Nonetheless, we are impressed with Constellation Brand's consistent focus on brand building and its initiatives to include new products in its wine and spirits businesses, which are the key revenue drivers for the stock. Moreover, the company is increasing its distribution points in retail and effectively executing its strategic merchandising initiatives to bolster sales.
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