Constellation Brands Inc

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STZ : NYSE : Consumer Goods
$164.63 | %
Today's Range: 163.56 - 165.21
Avg. Daily Volume: 1,472,900
07/29/16 - 4:07 PM ET

Financial Analysis


CONSTELLATION BRANDS's gross profit margin for the first quarter of its fiscal year 2016 is essentially unchanged when compared to the same period a year ago. The company managed to grow both sales and net income at a faster pace than the average competitor in its industry this quarter as compared to the same quarter a year ago. CONSTELLATION BRANDS has very weak liquidity. Currently, the Quick Ratio is 0.35 which clearly shows a lack of ability to cover short-term cash needs. The company's liquidity has decreased from the same period last year.

During the same period, stockholders' equity ("net worth") has increased by 15.23% from the same quarter last year. The key liquidity measurements indicate that the company is in a position in which financial difficulties could develop in the near future.

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Income Statement Q1 FY16 Q1 FY15
Net Sales ($mil)1871.81631.3
EBITDA ($mil)627.9500.3
EBIT ($mil)567.9445.6
Net Income ($mil)318.3238.6


Balance Sheet Q1 FY16 Q1 FY15
Cash & Equiv. ($mil)167.3130.7
Total Assets ($mil)17630.015247.3
Total Debt ($mil)8308.27317.6
Equity ($mil)6848.05942.5


Profitability Q1 FY16 Q1 FY15
Gross Profit Margin50.7248.54
EBITDA Margin33.5430.66
Operating Margin30.3427.32
Sales Turnover0.390.4
Return on Assets6.435.71
Return on Equity16.5614.66
Debt Q1 FY16 Q1 FY15
Current Ratio1.192.66
Debt/Capital0.550.55
Interest Expense84.777.8
Interest Coverage6.75.73


Share Data Q1 FY16 Q1 FY15
Shares outstanding (mil)200.5195.27
Div / share0.40.31
EPS1.551.18
Book value / share34.1530.43
Institutional Own % n/a n/a
Avg Daily Volume1468372.01699335.0

Valuation


BUY. The current P/E ratio indicates a discount compared to an average of 30.50 for the Beverages industry and a premium compared to the S&P 500 average of 25.05. To use another comparison, its price-to-book ratio of 4.84 indicates a significant premium versus the S&P 500 average of 2.81 and a significant discount versus the industry average of 7.99. The current price-to-sales ratio is well above the S&P 500 average and above the industry average, indicating a premium. Upon assessment of these and other key valuation criteria, CONSTELLATION BRANDS proves to trade at a discount to investment alternatives within the industry.


Price/Earnings
1 2 3 4 5
premium   discount
  Price/Cash Flow
1 2 3 4 5
premium   discount
STZ 29.75 Peers 30.50   STZ 21.31 Peers 22.23

Average. An average P/E ratio can signify an industry neutral price for a stock and an average growth expectation.

STZ is trading at a valuation on par with its peers.

 

Average. The P/CF ratio, a stock’s price divided by the company's cash flow from operations, is useful for comparing companies with different capital requirements or financing structures.

STZ is trading at a valuation on par to its peers.

 
Price/Projected
Earnings
1 2 3 4 5
premium   discount
  Price to
Earnings/Growth
1 2 3 4 5
premium   discount
STZ 23.29 Peers 26.78   STZ 1.38 Peers 1.35

Average. An average price-to-projected earnings ratio can signify an industry neutral stock price and average future growth expectations.

STZ is trading at a valuation on par with its peers.

 

Average. The PEG ratio is the stock’s P/E divided by the consensus estimate of long-term earnings growth. Faster growth can justify higher price multiples.

STZ trades at a valuation on par to its peers.

 
Price/Book
1 2 3 4 5
premium   discount
  Earnings Growth
1 2 3 4 5
lower   higher
STZ 4.84 Peers 7.99   STZ 28.70 Peers -6.24

Discount. A lower price-to-book ratio makes a stock more attractive to investors seeking stocks with lower market values per dollar of equity on the balance sheet.

STZ is trading at a significant discount to its peers.

 

Higher. Elevated earnings growth rates can lead to capital appreciation and justify higher price-to-earnings ratios.

STZ is expected to have an earnings growth rate that significantly exceeds its peers.

 
Price/Sales
1 2 3 4 5
premium   discount
  Sales Growth
1 2 3 4 5
premium   discount
STZ 4.88 Peers 4.70   STZ 10.68 Peers -4.95

Average. In the absence of P/E and P/B multiples, the price-to-sales ratio can display the value investors are placing on each dollar of sales.

STZ is trading at a valuation on par with its industry on this measurement.

 

Higher. A sales growth rate that exceeds the industry implies that a company is gaining market share.

STZ has a sales growth rate that significantly exceeds its peers.

 

 

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