Constellation Brands (STZ) opened fiscal Q1 2027 with revenue of US$2,432.7 million and basic EPS of US$3.80, alongside trailing 12 month EPS of US$10.48 and net income of US$1,824.4 million on revenue of US$9.1 billion. Over recent quarters the company has seen revenue range between US$1,920.2 million and US$2,515 million, with quarterly basic EPS moving between US$1.16 and US$3.80. Over the same period, trailing 12 month EPS shifted from a loss to US$10.48 as revenue moved from US$10.2 billion to US$9.1 billion. With profitability now firmly positive on a trailing basis, investors may focus on how these margins characterize the current phase of the Constellation Brands story.

See our full analysis for Constellation Brands.

With the latest numbers on the table, the next step is to see how this earnings profile lines up with the widely shared narratives around Constellation Brands, and where those storylines may need a reset.

Trailing profit now at US$1.8b

• On a trailing 12 month basis, Constellation Brands reports net income of US$1.8b on US$9.1b of revenue, with basic EPS of US$10.48, compared with a loss and basic EPS of US$2.45 one year earlier when revenue was US$10.1b.
• Consensus narrative points to cost savings and mix changes as key drivers, and the current numbers partly line up with that story:
  • Analysts expect restructuring and divestitures in Wine & Spirits to generate over US$200 million in annualized cost savings by fiscal 2028. The move from a loss to US$1.8b of profit gives that margin focus some support even though trailing revenue is lower than the US$10.1b reported a year ago.
  • The same narrative expects beer to keep operating margins around 39% to 40%. The shift from a loss to positive EPS over five years averaging 17.9% earnings growth per year suggests profitability has been strong enough to underpin those expectations, even if forecast revenue growth of about 2% a year is described as modest.

Q1 profit of US$653.8 million

• In Q1 2027, Constellation Brands reported net income of US$653.8 million on revenue of US$2,432.7 million, compared with US$201.8 million on US$1,920.2 million in Q4 2026 and US$516.1 million on US$2,515 million in Q1 2026.
• Bulls focus on cash generation and capital returns, and the earnings pattern gives them several points to lean on, but also some checks:
  • Bullish assumptions call for operating cash flow of about US$9b and free cash flow of US$6b from fiscal 2026 to 2028, alongside plans for up to US$4b of share repurchases. The current run rate of US$1.8b of trailing earnings and a 3.01% dividend yield fits with a company prioritizing shareholder payouts.
  • At the same time, bullish forecasts of revenue growing 3% a year and margins lifting from 18.5% to 22.4% sit against the more modest consensus forecast of roughly 2.3% annual earnings growth and 2% revenue growth, so Q1 strength needs to be weighed against those slower growth expectations.

For investors who want to see how these Q1 results stack up against the optimistic case on margins, cash flow, and brand strength, it is worth reading how bulls connect the numbers to their thesis 🐂 Constellation Brands Bull Case.

P/E of 12.9x and high debt

• Constellation Brands trades on a P/E of 12.9x, below the peer average of 20.1x and industry at 16.8x, with the current share price of US$136.88 also reported as 56.6% below an estimated DCF fair value of US$315.63.
• Critics focus on the company’s high debt level and relatively slow growth forecasts, and the valuation gap cuts both ways in that discussion:
  • Analyst price targets in the provided data center on US$174.95, implying a potential move of about 28% from the current US$136.88 share price, which aligns with the idea that the stock looks inexpensive relative to its reported DCF fair value and to peers.
  • On the other hand, forecasts for earnings growth of roughly 2.3% a year and revenue growth around 2% a year are slower than the cited US market rates, so bears can argue that a low P/E and discount to DCF fair value need to be weighed against both the high debt and these modest growth expectations.

Next Steps

To see how these results tie into long-term growth, risks, and valuation, check out the full range of community narratives for Constellation Brands on Simply Wall St. Add the company to your watchlist or portfolio so you'll be alerted when the story evolves.

The mix of positives and concerns around Constellation Brands is clear. Move quickly, review the numbers yourself, and weigh the 5 key rewards and 1 important warning sign

See What Else Is Out There Beyond Constellation Brands

Constellation Brands combines a lower P/E with modest forecast growth and a high debt load, which may leave some investors looking for a stronger balance sheet.

If you want more comfort around financial strength, use the solid balance sheet and fundamentals stocks screener (48 results) to quickly zero in on companies where leverage and resilience look much tighter today.

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.