Insightful Word
  • Investing
  • Stock
  • Economy
  • Politics
  • Investing
  • Stock
  • Economy
  • Politics
No Result
View All Result
Insightful Word
No Result
View All Result
Home Politics

Is Trump’s tariffs behind Constellation Brands stock slide on Monday?

admin by admin
February 3, 2025
in Politics
0
Is Trump’s tariffs behind Constellation Brands stock slide on Monday?
0
SHARES
9
VIEWS
Share on FacebookShare on Twitter

Investors seem to be bailing on Constellation Brands this morning after President Trump announced a 25% tariff on Mexico.

That’s because the alcoholic beverage company relies on Mexico for a bunch of its beer brands, including Pacifico, Corona, and even Modelo.  

Trump’s tariff announcement over the weekend made a Piper Sandler analyst downgrade Constellation Brands stock from “overweight” to “neutral” on Monday.

Shares of the largest beer import company in the US are down more than 5.0% at writing.

Why does it matter for Constellation Brands stock

Piper Sandler analyst Michael Lavery downgraded Constellation Brands this morning primarily because higher tariffs against Mexico could hurt its revenue moving forward.

Lavery expects the new tariffs to lower the company’s per-share earnings (F26E) by up to $3.75 “if these tariffs lasted a full fiscal year.”

He, however, agreed that “potential pricing and volume headwinds make it difficult to estimate.”

The US tariffs could add to the pressure on STZ’s numbers that already fell short of analysts’ estimates in the latest reported quarter.

Even without tariffs on Mexico, Constellation Brands was able to earn $3.25 a share on $2.46 billion in revenue only in its fiscal third quarter.

Analysts, in comparison, were at $3.34 per share and $2.54 billion, respectively.

That said, a healthy 2.23% dividend yield keeps Constellation Brands stock attractive for income investors.

STZ may not choose to raise prices

Piper Sandler expects Constellation Brands to remain patient and not increase prices immediately to pass on the additional cost to its customers.

It will opt for such an initiative only when it has more clarity on how long are these new tariffs expected to remain in place.

“Pricing may provide an offset, but taking pricing is challenging, given the key competitors like TAP and BUD produce in the US where no tariff cost applies,” according to Michael Lavery.

Versus the start of 2025, Constellation Brands stock is now down close to 25%.

Truist also recently turned dovish on STZ

Note that Piper Sandler is not the only among Wall Street firms that have been turning more dovish on Constellation Brands lately.

In January, analysts at Truist also reiterated their “hold” rating on STZ and lowered their price target to reflect the miss the company reported for its fiscal third quarter.

Truist now expects the alcoholic beverage company to earn up to $13.70 a share in the current year and up to $14.86 per share in 2026 – both below its previous estimates.

The investment firm took somewhat of a dovish stance on Constellation Brands stock as it lacks a meaningful catalyst until the peak summer season, which is about 6 months away for now.

Note that Truist’s call on STZ came even before the tariff announcement against Mexico.

The post Is Trump’s tariffs behind Constellation Brands stock slide on Monday? appeared first on Invezz

Previous Post

US markets slide as Trump’s tariffs rattle investors; S&P 500, Dow, Nasdaq fall

Next Post

OpenAI and SoftBank forge AI alliance to power Japan’s business revolution

admin

admin

Next Post
OpenAI and SoftBank forge AI alliance to power Japan’s business revolution

OpenAI and SoftBank forge AI alliance to power Japan’s business revolution

Trending News

Palo Alto Networks post-earnings decline: a short-term setback for long-term gains?

Palo Alto Networks post-earnings decline: a short-term setback for long-term gains?

May 21, 2025
Crypto Unregulated in India, But FIU Registration Mandatory: MoS Finance

Crypto Unregulated in India, But FIU Registration Mandatory: MoS Finance

July 23, 2025
Santander branch closures: 95 UK branches to be shut in digital banking shift

Santander branch closures: 95 UK branches to be shut in digital banking shift

March 19, 2025
Subscribe to Insightful Word


    Recent News

    Dow futures soar 250 points today: 5 things to know before Wall Street opens

    Dow futures soar 250 points today: 5 things to know before Wall Street opens

    August 7, 2025
    Affirm stock price is rising: is it a buy before earnings?

    Affirm stock price is rising: is it a buy before earnings?

    August 7, 2025
    Intel stock plunges sharply after Trump calls on CEO to resign: here’s why rebound may take time

    Intel stock plunges sharply after Trump calls on CEO to resign: here’s why rebound may take time

    August 7, 2025
    Goldman Sachs boosts Nvidia price target to $200 ahead of Q2 earnings

    Goldman Sachs boosts Nvidia price target to $200 ahead of Q2 earnings

    August 7, 2025

    Recent News

    Dow futures soar 250 points today: 5 things to know before Wall Street opens

    Dow futures soar 250 points today: 5 things to know before Wall Street opens

    August 7, 2025
    Affirm stock price is rising: is it a buy before earnings?

    Affirm stock price is rising: is it a buy before earnings?

    August 7, 2025

    Latest News

    • Dow futures soar 250 points today: 5 things to know before Wall Street opens
    • Affirm stock price is rising: is it a buy before earnings?
    • Intel stock plunges sharply after Trump calls on CEO to resign: here’s why rebound may take time

    About Insightful Word

    • Contacts
    • Cookie Notice
    • Privacy Policy
    • Terms of Service
    • Trading tools
    • Contacts
    • Cookie Notice
    • Privacy Policy
    • Terms of Service
    • Trading tools

    Copyright © 2025 Insightfulword.com. All Rights Reserved.

    No Result
    View All Result
    • Investing
    • Stock
    • Economy
    • Politics

    Copyright © 2025 Insightfulword.com. All Rights Reserved.