Episode Details

STZ (Constellation Brands) reported Q1 FY2027 earnings on 2026-06-30. Stock fell 13.9% on the print. Here's the breakdown: Is STZ a buy, hold, or sell after this quarter? In this Constellation Brands (STZ) Q1 FY2027 earnings breakdown we cover the revenue and EPS print, the 8-quarter trend, segment detail, the free-cash-flow bridge, forward guidance, peer valuation, and management & earnings quality - ending with a clear price-aware Buy / Hold / Avoid Call and a Wall Street consensus comparison. If you follow Consumer stocks or STZ earnings, this is the Q1 FY2027 deep dive. 🎧 Listen on Podbean: https://chargedalpha.podbean.com (also on Apple Podcasts & Spotify) 🔔 Subscribe for daily earnings deep-dives → @ChargedAlpha | Call tracker: chargedalpha.com THE CALL: HOLD (3/5 conviction, MODERATE) - CURRENT @ $139.13 - HOLD - BUY below $125.00 with $115.00 stop - AVOID above $185.00 TRIGGER: Beer depletions turning positive again - Modelo and Corona re-accelerating - OR clear relief on the Mexican-import and aluminum tariffs. WINDOW: Through Q2 FY2027 earnings (early October 2026) TRACKER: charged-alpha.com/calls/STZ WALL STREET CONSENSUS - Ratings: 5 Strong Buy / 10 Buy / 7 Hold / 1 Sell / 0 Strong Sell - BUY - Median 12-month price target: $172.00 (range $152 - $195) - Charged Alpha vs consensus: IN LINE, MORE CAUTIOUS THESIS Constellation is the dominant US importer of premium Mexican beer - Modelo and Corona - a high-margin, cash-rich franchise trading at 12 times earnings because the market fears its volume growth is over. Bull lever: If beer depletions stabilize and tariffs are managed, a 12-times multiple with a 7 percent free-cash-flow yield and buybacks re-rates a defensive, share-gaining staple that the market has left for dead. Key risk: If Modelo and Corona keep losing volume amid a weaker consumer and moderation trends, while tariffs squeeze the beer margin, then flat earnings become falling earnings and the cheap multiple is deserved. QUALITY CHECK - Management quality grade: B (New CEO Nicholas Fink inherits a well-run beer franchise and a disciplined capital-return program, but faces declining flagship volumes, a heavy tariff exposure, a still-broken win.) - Earnings quality grade: B+ (A clean, high-quality beat led by elite beer margins and strong cash generation, with one yellow flag: shipments ran ahead of depletions, hinting at some inventory build.) CHAPTERS 0:00 Hook 0:13 The Year in One Chart 0:56 The Print 1:28 Beat Decomposition 1:53 The Trend 2:35 The Segments 3:13 The FCF Bridge 3:47 Margin Quality 4:24 Guidance & The Narrative Diff 5:09 Catalyst Calendar 5:35 Peer Dot-Plot 6:06 Valuation 6:41 Management & Earnings Quality 7:47 The Call - Verdict 8:33 The Call - Evidence 9:08 The Call - Supporting Figures KEY METRICS - Q1 FY2027 - Revenue: $2.43B (YoY -3.0%, beat est by +1.9%) - EPS: $3.43 (vs $3.20 est, beat +7.2%) - Operating margin: 34.7% - Free cash flow: $0.50B (20.6% margin) NARRATIVE DIFF - what changed in management tone - Prior call: "Constellation's fiscal 2026 was defined by the resilience of its high-end beer portfolio even as the broader consumer softened and the wine business was reshaped." - This call: "high-end, imported beer portfolio anchored by the iconic Corona Extra and Modelo Especial, a flavorful lineup of Modelo Cheladas, and favorites like Pacifico, and Victoria" - Tone shift: The big change is at the top: Nicholas Fink took over as CEO in April, succeeding Bill Newlands, and this is his first quarter. The strategy is unchanged - beer-first, premium, disciplined - and guidance was reaffirmed. The most striking shift in the story is on the shareholder register: Warren Buffett's Berkshire, which built a large stake in 2024 and 2025, cut roughly 95% of it by early 2026. DATA SOURCES - FMP (financialmodelingprep.com) - Constellation Brands Q1 FY2027 press release + earnings call DISCLAIMER This is for informational and educational purp