Constellation Brands (STZ) shares could remain "range-bound" due to uncertainties related to the impacts of potential tariffs and new immigration controls from the administration of President Donald Trump, RBC Capital Markets said in a Tuesday note.
"In the near term we acknowledge beer fundamentals have taken a back seat to the uncertainty around the new administration's potential policies and the derivative implications on the topline and margins, ranging from tariffs to a more aggressive stance on immigration," said RBC.
The investment firm also noted that Constellation Brands' shares "are already pricing in a lot of bad news" given the stock's recent underperformance.
According to RBC, the company's beer positioning remains strong even amid the ongoing category weakness. Constellation Brands can also compound its beer top line at 7% to 9% over the next three year through share gains and tailwinds from innovation, distribution, and demographic tailwinds RBC added.
RBC Capital Markets has an outperform rating on Constellation Brands, with a $308 price target.
Price: 221.74, Change: -1.19, Percent Change: -0.53
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