As of June 21, 2025, Constellation Brands Inc's estimated intrinsic value ranges from $94.99 to $266.20 per share, depending on the valuation methodology applied.
| Valuation Method | Fair Value (USD) | Implied Upside/Downside |
|---|---|---|
| Discounted Cash Flow (10Y) | $266.20 | +63.9% |
| Discounted Cash Flow (5Y) | $215.81 | +32.9% |
| Dividend Discount Model (Multi-Stage) | $94.99 | -41.5% |
| Earnings Power Value | $104.19 | -35.8% |
Is Constellation Brands Inc (STZ) undervalued or overvalued?
With the current market price at $162.40, the stock appears to be moderately undervalued.
Intrinsic value represents the "true" worth of a company based on its fundamentals rather than market sentiment. We've employed multiple methodologies to triangulate Constellation Brands Inc's intrinsic value, including:
The cost of capital is a critical factor in valuation models, representing the required return for investors.
| WACC Component | Low | High |
|---|---|---|
| Long-term bond rate | 3.9% | 4.4% |
| Equity market risk premium | 4.6% | 5.6% |
| Adjusted beta | 0.37 | 0.5 |
| Cost of equity | 5.6% | 7.7% |
| Cost of debt | 4.0% | 4.8% |
| Tax rate | 26.2% | 27.0% |
| Debt/Equity ratio | 0.39 | 0.39 |
| After-tax WACC | 4.8% | 6.5% |
Our DCF model projects cash flows over 5-year and 10-year horizons, with the following key assumptions:
| DCF Model | Fair Value | Enterprise Value | % from Terminal Value |
|---|---|---|---|
| 5-Year Growth | $216 | $49,849M | 93.0% |
| 10-Year Growth | $266 | $58,819M | 85.7% |
| 5-Year EBITDA | $55 | $21,204M | 83.6% |
| 10-Year EBITDA | $85 | $26,606M | 68.3% |
The DDM values a company based on its expected future dividend payments. We used two approaches:
EPV assesses a company's value based on its current normalized earnings power, assuming no growth.
| EPV Component | Value |
|---|---|
| Normalized Earnings | $1,660M |
| Discount Rate (WACC) | 6.5% - 4.8% |
| Enterprise Value | $25,517M - $34,439M |
| Net Debt | $11,430M |
| Equity Value | $14,087M - $23,009M |
| Outstanding Shares | 178M |
| Fair Value | $79 - $129 |
| Selected Fair Value | $104.19 |
| Metric | Value |
|---|---|
| Market Capitalization | $28910M |
| Enterprise Value | $40340M |
| Trailing P/E | 0.00 |
| Forward P/E | 234.84 |
| Trailing EV/EBITDA | 8.60 |
| Current Dividend Yield | 249.32% |
| Dividend Growth Rate (5Y) | 6.21% |
| Debt-to-Equity Ratio | 0.39 |
To determine the most reliable intrinsic value estimate, we weigh each valuation method based on:
| Valuation Method | Weight | Weighted Value |
|---|---|---|
| Discounted Cash Flow (10Y) | 35% | $79.86 |
| Discounted Cash Flow (5Y) | 29% | $53.95 |
| Dividend Discount Model (Multi-Stage) | 24% | $19.00 |
| Earnings Power Value | 12% | $10.42 |
| Weighted Average | 100% | $192.04 |
Based on our comprehensive valuation analysis, Constellation Brands Inc's weighted average intrinsic value is $192.04, which is approximately 18.3% above the current market price of $162.40.
Key investment considerations:
Given these factors, we believe Constellation Brands Inc is currently moderately undervalued with the potential for long-term appreciation based on the company's growth trajectory and financial strength.