(This Constellation Brands article has been corrected to reflect the quarterly profit decline of Willamette Valley Vineyards.)

VICTOR, N.Y. ( TheStreet) -- Shares of Constellation Brands ( STZ) edged higher Monday after a Citi analyst reiterated a buy rating on the stock, noting the company recently boosted its share of the U.S. wine market for the first time in more than a year.

Already the world's biggest wine company, Constellation Brands saw a slight 0.2% increase in market share to 15.6% of the U.S. market in the four weeks ended Aug. 7, according to Citi analyst Vivien Azer. The tick higher comes after the company posted consistent declines since April 2009.

"We find these improving trends encouraging as we believe they reflect the successful implementation of STZ's distribution change," Azer said, adding that she expects Constellation Brands' efforts "to continue driving improved market shares and sales growth."

Shares of Constellation Brands closed Monday at $16.68, up 2 cents. Volume of 1 million was half the issue's trailing three-month daily average. Year-to-date, the stock is up 4.6%.

U.S. wine sales remained "robust" even as discretionary spending continued to be a concern, the analyst said, with U.S. wine category sales up 5.7% year-to-date, according to Nielsen.

In line with recorded wine sales growth so far this year, Constellation Brands upped its forecast in early July. The company expects category sales growth of 1-2% for 2010, 100 basis points ahead of its prior outlook.

Azer was encouraged by the recent word from Constellation Brands that it would continue to focus on improving profitability in its international wine business, even though the segment accounts for just 5% of its earnings before interest and tax. The analyst said she heard from industry sources Constellation Brands had sold its Australia-based Amberley Estate vineyard while retaining the Amberley brand.

Azer also kept intact her $21 price target on Constellation Brands' shares on the view that its "improving market share trends, coupled with healthy category growth" provide "increased confidence in the company's ability to deliver improved sales growth" in the second half of fiscal 2010.

Citi currently expects Constellation Brands to earn $1.77 per share in fiscal 2011 on revenue of $3.38 billion, and $2.00 per share in fiscal 2012 on revenue of $3.47 billion. The average analysts' estimates for these periods are for earnings of $1.72 a share on revenue of $3.37 billion and $1.88 a share on revenue of $3.46 billion respectively.

Separately, Constellation Brands said Monday it intends to delist from the Australian Securities Exchange by the end of fiscal year 2011, ending Feb. 28, 2011. The company cited thin trading of its securities in Australia, coupled with the additional complexity of administration and compliance associated with this listing, for the decision.

Constellation Brands distributes more than 100 wine, beer and alcohol brands including Woodbridge by Robert Mondavi, Ravenswood, Manischewitz and Clos Du Bois. Spirit brands include SVEDKA Vodka and Black Velvet Canadian Whisky while its beer offerings include Corona Light and Tsingtao Lager.

Among other publicly traded wine companies, American depositary receipts of Vina Concha y Toro ( VCO), a producer and exporter of wines in Chile, fell 0.4% to close at $46.60. The winemaker grew sales of one of its lower-priced brands by 27% last year, even as the Chilean economy shrank by 1.5%.

"For 2008-11, our objective is growth of 20% to 25% in each of our segments," CEO Eduardo Giulisasti told The Financial Times.

Turner, Ore.-based Willamette Valley Vineyards ( WVVI) lost 0.6% in trading Monday to close at $3.51. The winemaker said earlier this month its second-quarter profits plummeted 49.5% to $128,287, or 3 cents per share, as higher costs ate into its 1% revenue growth.

--Written by Miriam Marcus Reimer in New York.


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