Citi maintains a "Buy" rating on Constellation Brands (STZ), despite recent market volatility following the U.S. presidential election. The stock is trading at $228.11, down 3.81% as of November 6. Citi highlights potential risks from a Trump administration, including a 10% tariff on Mexican beer imports and possible deportations of undocumented immigrants, which could impact STZ's EPS by approximately 5% in FY26. However, Citi notes that STZ could offset these risks with a 10% price increase on its beer brands and benefit from the Mexican peso's devaluation, as 25% of beer COGS are MXN-denominated.
STZ's beer fundamentals remain robust, with U.S. volumes accelerating to +5.2% in September-October, up from +3.6% in the previous quarter. Citi finds the current valuation of ~16x CY25 P/E compelling, especially given the company's strong distribution strategy and brand portfolio. "We view STZ as well-positioned in the beer category with an attractive portfolio of growing brands," Citi states, setting a target price of $305 based on a 20.5x CY25E P/E multiple.