Is Constellation Brands (STZ) Pricing Reflecting Its Recent Multi‑Year Share Price Weakness?

Simply Wall St

Tue, February 24, 2026 at 2:08 PM GMT+9 6 min read

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If you are wondering whether Constellation Brands is offering good value right now, it helps to separate the share price story from what the underlying valuation actually suggests.

The stock last closed at US$159.42, with recent returns of 6.8% over 7 days, 0.4% over 30 days, 12.9% year to date, and an 8.6% decline over 1 year, 24.8% decline over 3 years, and 20.3% decline over 5 years.

These moves sit against a backdrop where Constellation Brands continues to draw attention for its portfolio of beer, wine, and spirits brands, along with management decisions that shape how investors think about its future cash generation and balance sheet strength. Together, these factors help explain why sentiment around the shares has shifted at different points over the last few years.

On our valuation checks, Constellation Brands scores 2 out of 6. This sets up a closer look at how different valuation methods assess the stock today and points to an even richer way to think about value that we will come back to at the end of this article.

Constellation Brands scores just 2/6 on our valuation checks. See what other red flags we found in the full valuation breakdown.

Approach 1: Constellation Brands Discounted Cash Flow (DCF) Analysis

A Discounted Cash Flow, or DCF, model projects the cash a company may generate in the future and then discounts those projected cash flows back into today’s dollars to get an estimate of what the business could be worth now.

For Constellation Brands, the model used is a 2 Stage Free Cash Flow to Equity approach based on cash flow projections. The latest twelve month free cash flow is about $1.59b. Analyst and extrapolated estimates point to free cash flow of around $2.35b in 2030, with intermediate projections between 2026 and 2035 ranging from roughly $1.73b to $2.69b, all in dollar terms and discounted back to today.

Putting those discounted figures together, the model arrives at an estimated intrinsic value of about $321.34 per share, compared with the recent share price of $159.42. That implies the stock is around 50.4% undervalued based on this DCF output.

Result: UNDERVALUED

Our Discounted Cash Flow (DCF) analysis suggests Constellation Brands is undervalued by 50.4%. Track this in your watchlist or portfolio, or discover 56 more high quality undervalued stocks.

STZ Discounted Cash Flow as at Feb 2026

Head to the Valuation section of our Company Report for more details on how we arrive at this Fair Value for Constellation Brands.

Story Continues  

Approach 2: Constellation Brands Price vs Earnings

For profitable companies like Constellation Brands, the P/E ratio is a useful shorthand for how much investors are paying for each dollar of earnings. It ties the share price directly to the business’s current earnings power, which is often a key anchor for valuation.

What counts as a “normal” P/E depends on how quickly earnings are expected to grow and how risky those earnings are. Higher expected growth or lower perceived risk can justify a higher multiple, while slower growth or higher risk tends to support a lower one.

Constellation Brands currently trades on a P/E of 24.91x. That sits above the Beverage industry average of 17.66x and also above the peer average of 20.20x. Simply Wall St’s Fair Ratio for the company is 23.61x, which is its proprietary view of what an appropriate P/E could be after considering factors such as earnings growth, profit margins, industry, market cap and risk. This tailored Fair Ratio aims to give a more company specific yardstick than broad industry or peer comparisons. Since the current P/E is slightly above the Fair Ratio, the shares screen as modestly overvalued on this metric.

Result: OVERVALUED

NYSE:STZ P/E Ratio as at Feb 2026

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Upgrade Your Decision Making: Choose your Constellation Brands Narrative

Earlier we mentioned that there is an even better way to understand valuation. On Simply Wall St’s Community page you can use Narratives, where you set your own story for Constellation Brands, link that story to a forecast for revenue, earnings and margins, and arrive at a fair value you can compare with today’s price. The platform updates those Narratives automatically as fresh news or earnings arrive. One investor might lean toward a higher fair value like US$220.00 if they put more weight on beer recovery and cash flow, while another might anchor closer to US$118.00 if they focus on softer revenue assumptions and category risks. Both can see clearly how their view translates into numbers rather than relying only on a single P/E or DCF output.

For Constellation Brands, here are previews of two leading Constellation Brands Narratives:

🐂 Constellation Brands Bull Case

Fair value: US$170.73 per share

Implied undervaluation vs last close: about 6.6%

Revenue growth assumption: 96.05%

Analysts see cost savings from Wine & Spirits restructuring and divestitures supporting higher margins and earnings over time.

Beer capacity projects in Mexico and a focus on brand health and Hispanic consumer loyalty are used to support the long term cash flow outlook.

The narrative links a consensus price target of US$183.00 to assumptions about earnings reaching US$2.2b by 2028, a 16.3x P/E, and ongoing share buybacks.

🐻 Constellation Brands Bear Case

Fair value: US$118.00 per share

Implied overvaluation vs last close: about 35.1%

Revenue growth assumption: 3.41% decline

The bearish view leans on softer revenue expectations, with annual revenue decline assumptions and a heavier focus on risks around Mexican beer exposure and regulation.

It assumes a lower 12.4x P/E on 2028 earnings of about US$2.1b, giving a fair value of US$131.77 that is below the current share price.

This narrative highlights moderation in alcohol consumption, higher costs and competition from alcohol alternatives as key constraints on long term upside.

If you want to see how other investors are framing the same facts, you can read the full bullish and bearish write ups for Constellation Brands, compare the numbers behind each view, and decide which story lines up more closely with your own expectations.

Curious how numbers become stories that shape markets? Explore Community Narratives

Do you think there’s more to the story for Constellation Brands? Head over to our Community to see what others are saying!

NYSE:STZ 1-Year Stock Price Chart

_ This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned._

Companies discussed in this article include STZ.

Have feedback on this article? Concerned about the content? Get in touch with us directly._ Alternatively, email editorial-team@simplywallst.com_

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