Wondering if Constellation Brands is a hidden gem or if the market’s already caught on to its true value? You’re not alone. This deep dive is for you.
The stock saw a 3.5% bump over the past week but is still down 39.9% year-to-date. This shows just how much sentiment has shifted lately.
Recently, Constellation Brands has been in the news for its expansion into new beverage categories and its strategic acquisition activity. These moves are helping to reshape its portfolio, which could explain some of the volatility as investors reassess future growth prospects and risks.
According to our valuation checks, the company scores 4 out of 6 for being undervalued. This puts it ahead of many peers, but not quite in the clear just yet. Let’s break down how we arrive at this score and why, later in the article, you’ll see there is an even more insightful way to look at valuation that most investors miss.
Find out why Constellation Brands’s -42.8% return over the last year is lagging behind its peers.
A Discounted Cash Flow (DCF) model estimates a company’s intrinsic value by forecasting its future cash flows and then discounting those back to their value today. In Constellation Brands’ case, analysts project free cash flow (FCF) for the next few years, and further projections are created using reasonable expectations for the company’s industry and market position.
Currently, Constellation Brands is generating free cash flow of about $1.63 billion. Analyst estimates, supplemented by extrapolations, suggest this could rise to approximately $2.52 billion by 2030. The DCF model used here is a two-stage approach. This means it considers both near-term growth (driven by analyst forecasts up to 2027) and longer-term potential (extrapolated beyond that date).
Based on these projections and discounted back to today’s dollars, the estimated intrinsic value of Constellation Brands comes out to $332.88 per share. With the stock trading at nearly a 59.8% discount to this fair value, the evidence points strongly toward the stock being undervalued at current prices.
Result: UNDERVALUED
Our Discounted Cash Flow (DCF) analysis suggests Constellation Brands is undervalued by 59.8%. Track this in your watchlist or portfolio, or discover 927 more undervalued stocks based on cash flows.
STZ Discounted Cash Flow as at Nov 2025
Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Constellation Brands.
The Price-to-Earnings (PE) ratio is one of the most widely used valuation metrics for established, profitable companies like Constellation Brands. It helps investors understand how much they are paying for each dollar of a company’s earnings, making it especially practical for businesses with consistent profit generation.
However, what counts as a “fair” PE ratio is not set in stone. Higher growth expectations typically justify a higher PE, since investors are willing to pay a premium for future earnings potential. On the other hand, businesses facing greater risks or lower expected growth rates tend to have lower PE multiples, reflecting more cautious sentiment.
At present, Constellation Brands is trading at a PE ratio of 19x. This places it close to both its peer average of 19.2x and a bit above the broader beverage industry average of 17.7x. Simply Wall St’s proprietary “Fair Ratio” for Constellation Brands is calculated at 20.8x, taking into account not just industry benchmarks, but also the company’s unique growth opportunities, profit margin, market cap, and risk profile.
Unlike simple industry or peer comparisons, the Fair Ratio provides a more holistic assessment by weighing business-specific factors alongside sector trends. This means it can identify under- or overvaluation more precisely, especially for companies that do not fit neatly into generic industry categories.
Comparing Constellation Brands’ current PE of 19x to its Fair Ratio of 20.8x suggests the stock may still be undervalued on this basis.
Result: UNDERVALUED
NYSE:STZ PE Ratio as at Nov 2025
PE ratios tell one story, but what if the real opportunity lies elsewhere? Discover 1430 companies where insiders are betting big on explosive growth.
Earlier, we mentioned there is an even better way to understand valuation, so let’s introduce you to Narratives. Put simply, a Narrative is your personal story about a company. It is how you connect the dots between business drivers, key financial assumptions (like future revenue or margins), and what you believe the company’s fair value should be.
Unlike traditional analyses that focus only on numbers, Narratives bring context and meaning by linking a company’s story to specific financial forecasts and valuation targets. On Simply Wall St’s Community page, you can access and build Narratives with ease, joining millions of investors who use this tool to make more informed buy or sell decisions by directly comparing their assumed fair value with the latest market price.
The real power of Narratives is their dynamic nature. They update automatically as new data, news, or earnings come in, helping you stay relevant and responsive in your investment thinking. For example, two investors might both follow Constellation Brands: one expects earnings to sharply recover as distribution initiatives gain traction and sets their fair value as high as $247, while another, concerned about persistent demand weakness, believes fair value is as low as $123. Narratives let you see and compare all these perspectives, so you can decide which story and assumptions you agree with.
Do you think there’s more to the story for Constellation Brands? Head over to our Community to see what others are saying!
NYSE:STZ Community Fair Values as at Nov 2025
This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.
Companies discussed in this article include STZ.
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