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Constellation is Replacing Low-End Wine With High-Grade Cannabis

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Constellation Brands  (STZ) - Get Constellation Brands Inc. Report is Real Money's Stock of the Day.

The Corona beer maker reported Q1 earnings last Friday, beating on both the top and bottom lines.

Following the release, analysts at both Wells Fargo and BMO Capital reiterated their Outperform rating on the stock while analysts at Jefferies reaffirmed the stock as a Top Pick.

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Earlier in the year, Constellation said it would sell a portfolio of 30 lower-priced wine and spirit brands to E. & J. Gallo Winery for around $1.7 billion as it continues to shift towards higher-end labels and cannabis-infused products.

The company is beginning to realize the benefits of that sale, however, beer remains their largest source of revenue, and Constellation will rely on the segment to support earnings as the transition to higher-end wine and cannabis product takes hold.

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