Is Constellation Brands, Inc. (STZ) overvalued or undervalued?
Updated Nov 10, 2026 · hand-researched model · educational, not advice
At a recent price of $145.51, Constellation Brands, Inc. (STZ) sits inside a range too wide to call either way: our valuation lenses put the business somewhere between $83.71 and $329.11 per share. They disagree too widely for us to state a single fair value. We publish the range rather than a midpoint because a number that precise would claim more than the methods can support. This is an educational model, not a price target or a recommendation.
The valuation discounts Constellation Brands, Inc.'s projected free cash flows at a weighted-average cost of capital (WACC) of 7.8%, with a long-run terminal growth rate of 2.5%. About 78% of the enterprise value comes from the terminal value — the portion beyond the explicit forecast window — which is typical for a stable, cash-generative business and a reminder that small changes in the discount rate or terminal growth assumption swing the intrinsic value meaningfully.
Running the DCF in reverse — solving for the growth the current price already assumes — the market is implying roughly -4.7% annual revenue growth for STZ. Our base case instead compounds to about 1.7% a year over the same forecast, so the market is pricing in slower growth than our base case. The reverse-DCF is a quick sanity check: it reframes 'is this stock cheap?' as 'do I believe the growth the price requires?' rather than arguing over a single point estimate of fair value.
Sensitivity matters more than any single number. Across a reasonable band of discount-rate assumptions, STZ's modeled DCF value ranges from about $94.71 to $354.76 per share. If that range still sits below today's price, the market is optimistic relative to the model across the whole band; if it brackets the price, the stock is roughly fairly valued on our assumptions. Use the interactive slider to see exactly where your own cost-of-capital view lands.
How to read this page: the DCF fair value is what Constellation Brands, Inc. would be worth if its cash flows grow as modeled and are discounted at the stated WACC. The assumptions table shows every input and its source; the reverse-DCF shows what the market believes; the sensitivity band shows how fragile the answer is. None of this is investment advice — it is a transparent, auditable framework for forming your own view of STZ's intrinsic value. Figures update as new filings and prices come in.
The assumptions behind STZ's DCF
| Input | Value | Source |
|---|---|---|
| Base-year revenue | $8,997,000,000 | Constellation Brands Q4 FY2026 earnings release, 8-K Ex-99.1 (accession 0000016918-26-000008, filed 2026-04-08); same totals in the FY2026 10-K (accession 0000016918-26-000011, filed 2026-04-22): CONTINUING PERIMETER, NOT THE HEADLINE. Reported FY2026 (year to 2026-02-28) net sales were $9,139M (Beer $8,315.2M + Wine & Spirits $823.8M), -10% YoY. That figure still carries $142M of sales from the mainstream wine brands sold on 2025-06-02 (the '2025 Wine Divestitures'), booked between 1 March and 1 June 2025 before closing; the company's own FY2027 guidance explicitly excludes that $142M (Q1 FY2027 release, Outlook). Base = $9,139M - $142M = $8,997M: Beer $8,315.2M (92%) + remaining Wine & Spirits $681.8M. Using the continuing base means management's ORGANIC growth guidance can be applied to it directly. CROSS-CHECK, Q1 FY2027 (to 2026-05-31): net sales $2,433M vs $2,373M organic prior-year quarter (+2.5%; the release rounds to +3% organic); Beer +2% to $2,283.5M. |
| Base EBIT margin | 32.4% | Constellation Brands Q4 FY2026 earnings release, 8-K Ex-99.1 (accession 0000016918-26-000008), segment and comparable-adjustment reconciliations: COMPARABLE operating income on the continuing perimeter. FY2026 GAAP operating income $2,721.4M (29.8% of $9,139M); comparable $2,943.2M (32.2%) after $221.8M of net comparable adjustments: asset impairments $109.8M, 2025 Restructuring Initiative $72.2M, transition-services costs for the divested wine $35.7M, loss on sale of business $31.9M, CEO severance $7.8M and reconfiguration $15.2M, less $55.0M of derivative and other gains. Most of those charges belong to the wine exit and are gone with it, and management guides FY2027 REPORTED and comparable operating margin to the same 32-33% (no charges expected). I then take out the divested wine's contribution: $24.5M of CAM in Mar-May 2025 (Q1 FY2027 release, footnote 1), treated as an upper bound because its own marketing and SG&A are not disclosed. ($2,943.2M - $24.5M) / $8,997M = 32.44%. Segment build: Beer 38.0% ($3,161.0M), Wine & Spirits $10.5M, Corporate -$228.3M. CROSS-CHECK: Q1 FY2027 comparable OI $834M on $2,433M = 34.3% (Q1 is a seasonally strong quarter; Beer margin 39.0%). The GAAP-vs-comparable choice is a judgement that RAISES the value: STZ has booked some 'non-recurring' charge every year; the forecast takes a 50bp haircut from Year 2 for that reason (see forecast.ebit_margin). |
| Forecast revenue growth | 0% → 2% → 2% → 2% → 2% | Assumption — TickerWorth's 5-year explicit forecast |
| Risk-free rate | 5.2% | US 10Y Treasury constant maturity (FRED DGS10): 5.24% on 2026-10-01, the latest published observation. Shared by every model in this tracker. |
| Beta | 0.80 | Assumption — Yahoo Finance 5Y-monthly beta via yfinance (0.429, read 2026-10-05) + own 10-year monthly regression vs S&P 500: NORMALIZED UP from the published 0.429 to 0.80, the SAME METHOD this tracker used for Coca-Cola (0.342 -> 0.47) and PepsiCo (0.361 -> 0.48): my 10-year monthly regression of yfinance adjusted closes against the S&P 500 (120 months, Nov-2016 to Sep-2026) gives 0.80; the same regression over 5 years gives 0.44, matching the published figure. CONSERVATIVE: it LOWERS the value. Reason: at 0.429 STZ's cost of equity would be 7.39%, about 110bp above the ~6.3% it would pay on a new 10-year bond; equity behind a BBB-tier balance sheet levered ~3x EBITDA cannot sensibly be priced that close to its debt. Caveat on the 10-year window: it includes 2018-2020, when STZ's Canopy Growth cannabis stake made the stock unusually volatile, which pushes the estimate up. Midpoint of the defensible range is ~0.62 (Blume-adjusted published beta); that would raise the value by about $28/share ($191.69), and the published 0.429 by about $68 ($230.86), which is why the beta is the single biggest judgement in this file. |
| Terminal growth | 2.5% | Assumption — house default: House default 2.5% (roughly long-run nominal GDP), kept for comparability. For STZ it is a real judgement, not a formality: US beer volumes are in long-run decline and STZ's growth is share gains plus price, so 2.5% forever assumes Mexican import brands keep taking share for decades. 2.0% takes about $16/share off ($146.95); 3.0% adds about $20 ($182.86). Today's price needs only ~0.6% forever. Must remain < WACC (7.75%). |
| Diluted shares | 172M | Constellation Brands Q1 FY2027 10-Q (accession 0000016918-26-000029, filed 2026-07-01), income statement: Weighted-average diluted shares, Q1 FY2027 (three months to 2026-05-31): 172.407M (basic 172.186M). Shares outstanding were already lower, 170.75M on 2026-06-26, because buybacks are running ($324M repurchased in FY2027 through June; $924M in FY2026; $4.0B authorization to Feb-2028). Using the weighted count is slightly conservative (~1% fewer dollars per share than the spot count). |
| Market price | $145.51 | Delayed quote · as of 2026-11-10 04:57 UTC |
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