NEW YORK (TheStreet) -- RBC Capital Markets raised its price target on Constellation Brands(STZ) - Get Report to $165 from $148 on Wednesday morning. The firm maintained its "outperform" rating on the stock.
The Victor, NY-based beverage alcohol company is a supplier of beer, wine and spirits.
The upgrade comes on the back of accelerating trends in the beer business and the company's recent acquisition of Ballast Point Brewing & Spirits, a craft beer company, in November, the firm said.
"We expect STZ's move into the craft space with the Ballast Point acquisition to further enable the company to sustainably deliver high-single digit top-line growth for the foreseeable future," RBC analysts said.
Shares of Constellation Brands are up by 1.15% to $140.97 at the start of trading on Wednesday.
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author. TheStreet Ratings has this to say about the recommendation:
We rate CONSTELLATION BRANDS as a Buy with a ratings score of A+. This is based on the convergence of positive investment measures, which should help this stock outperform the majority of stocks that we rate. The company's strengths can be seen in multiple areas, such as its revenue growth, expanding profit margins, good cash flow from operations, compelling growth in net income and notable return on equity. We feel its strengths outweigh the fact that the company has had generally high debt management risk by most measures that we evaluated.
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth came in higher than the industry average of 10.7%. Since the same quarter one year prior, revenues slightly increased by 8.1%. Growth in the company's revenue appears to have helped boost the earnings per share.
- 48.08% is the gross profit margin for CONSTELLATION BRANDS which we consider to be strong. It has increased from the same quarter the previous year. Along with this, the net profit margin of 17.44% is above that of the industry average.
- Net operating cash flow has increased to $597.40 million or 37.08% when compared to the same quarter last year. The firm also exceeded the industry average cash flow growth rate of -4.31%.
- The net income growth from the same quarter one year ago has significantly exceeded that of the S&P 500 and the Beverages industry. The net income increased by 54.4% when compared to the same quarter one year prior, rising from $195.80 million to $302.40 million.
- The return on equity has improved slightly when compared to the same quarter one year prior. This can be construed as a modest strength in the organization. Compared to other companies in the Beverages industry and the overall market on the basis of return on equity, CONSTELLATION BRANDS has underperformed in comparison with the industry average, but has exceeded that of the S&P 500.
- You can view the full analysis from the report here: STZ