DCF Studio

    STZ · NYQ · Consumer Defensive

    Constellation Brands, Inc.

    Also onShortfallConsensus DriftCrosscheck

    Implied value per share

    USD 191.04

    Market price

    USD 140.67

    Implied upside

    +35.8%

    10-year forecast · Perpetuity growth terminal value · Mid-year discounting · Base case · Price 2026-11-02 · Accounts to 2026-02-28

    AdjustedCapital expenditure runs at 11.3% of revenue against depreciation of 4.3%. A perpetuity has to be a steady state, so the forecast tapers capex to maintenance at depreciation plus the reinvestment terminal growth requires (g/ROIC of NOPAT), and the terminal year carries on from there. The bridge is shown under Terminal Value.

    Value Per Share

    Perpetuity growth
    USD 191.04+35.8%
    Exit multiple
    USD 145.10+3.2%
    Market price
    USD 140.67

    Same forecast, different terminal treatment. Percentages vs price.

    Forecast Cashflows

    Reporting currency (USD). Outflows negative.

    0bn1bn2bnFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36
    Nominal FCFFDiscounted to todayUSD
    LineFY27FY28FY29FY30FY31FY32FY33FY34FY35FY36CAGR
    RevenueUSD 9.1bnUSD 9.3bnUSD 9.4bnUSD 9.6bnUSD 9.8bnUSD 9.9bnUSD 10.2bnUSD 10.4bnUSD 10.6bnUSD 10.9bn+2.0%
    EBITUSD 2.9bnUSD 2.9bnUSD 3.0bnUSD 3.0bnUSD 3.1bnUSD 3.1bnUSD 3.2bnUSD 3.3bnUSD 3.4bnUSD 3.4bn+2.0%
    NOPATUSD 2.3bnUSD 2.3bnUSD 2.3bnUSD 2.4bnUSD 2.4bnUSD 2.5bnUSD 2.5bnUSD 2.6bnUSD 2.7bnUSD 2.7bn+2.0%
    Add depreciation & amortisationUSD 394.6mUSD 400.5mUSD 406.9mUSD 414.0mUSD 421.8mUSD 430.2mUSD 439.3mUSD 449.2mUSD 459.9mUSD 471.3m+2.0%
    Less capital expenditureUSD -1.0bnUSD -1.0bnUSD -1.0bnUSD -1.0bnUSD -1.0bnUSD -1.0bnUSD -1.0bnUSD -1.0bnUSD -1.0bnUSD -1.0bn+0.1%
    Capex, % of revenue11.3%11.1%10.9%10.7%10.5%10.3%10.1%10.0%9.8%9.6%-
    Less increase in working capitalUSD 2.6mUSD -20.7mUSD -22.8mUSD -25.0mUSD -27.3mUSD -29.7mUSD -32.2mUSD -34.8mUSD -37.6mUSD -40.5m-
    Free cashflow to firmUSD 1.6bnUSD 1.7bnUSD 1.7bnUSD 1.8bnUSD 1.8bnUSD 1.9bnUSD 1.9bnUSD 2.0bnUSD 2.0bnUSD 2.1bn+2.8%
    Discount factor0.96940.91090.85600.80440.75590.71030.66750.62720.58940.5539-
    Present valueUSD 1.6bnUSD 1.5bnUSD 1.5bnUSD 1.4bnUSD 1.4bnUSD 1.3bnUSD 1.3bnUSD 1.2bnUSD 1.2bnUSD 1.2bn-
    Present Value Of The ForecastUSD 13.5bn

    Discount Rate

    Source shown per component. All overridable above.

    Risk-free rate4.89%US 10-year Treasury (^TNX), 2026-11-02
    Equity risk premium4.23%Damodaran, January 2026
    Beta0.595Reported 0.396, pulled toward 1.0 (Blume)
    Cost of equity7.41%Risk-free + beta x equity risk premium
    Cost of debt5.44%Risk-free + 55bp, the spread for a AA rating at 7.9x interest cover. Book interest / average debt was lower, at 3.1%.
    Market capitalisationUSD 23.8bn68.0% of capital
    Total debtUSD 11.2bn32.0% of capital, book value as a proxy
    Tax rate21.0%Effective, capped at statutory
    WACC6.42%E/V x Re + D/V x Rd x (1 - t)

    Terminal Value

    Perpetuity growth is intrinsic. The exit multiple defaults to the company's current EV/EBITDA, so it answers a different question - what the shares are worth if today's rating holds and EBITDA grows as forecast.

    Perpetuity growth at 2.50%

    Value per shareUSD 191.04

    70% of EV

    Forecast FCFF, final year
    USD 2.1bn
    Capex at depreciation, working capital in reinvestment
    USD 2.7bn
    Less reinvestment at g/ROIC (21.0% of NOPAT)
    USD -571.9m
    Capitalised
    USD 2.1bn
    ROIC (reported)
    11.9%
    Terminal value, undiscounted
    USD 56.2bn
    Terminal value, discounted
    USD 31.1bn
    Enterprise value
    USD 44.6bn
    Less net debt
    USD 11.1bn
    Equity value
    USD 33.5bn

    Exit at 10.6x EBITDA

    Value per shareUSD 145.10

    63% of EV

    Terminal value, undiscounted
    USD 41.6bn
    Terminal value, discounted
    USD 23.0bn
    Enterprise value
    USD 36.6bn
    Less net debt
    USD 11.1bn
    Equity value
    USD 25.5bn

    Spread between methods: 27%.

    Sensitivity

    Value per share (USD) by discount rate and long-run growth.

    Long-run growth
    Discount rate1.50%2.00%2.50%3.00%3.50%
    4.42%338.02383.96454.84577.07834.69
    5.42%234.07252.43277.68314.10370.44
    6.42%172.55180.56191.04205.07224.48
    7.42%131.93135.31139.70145.43153.02
    8.42%103.15104.23105.74107.80110.59

    Outlined: this model. Green text: above today's price of 140.67. Shading: distance from this model's own value.

    Priced In

    What each input would have to be to justify the current price, one at a time.

    InputActualModelImplied
    Revenue growth, a year-1.1%1.8%-0.8%
    EBIT margin33.0%31.6%25.7%
    Discount rate-6.4%7.4%
    Download as Excel

    Live formulas, not pasted numbers - edit a driver and the workbook reprices.

    Yahoo Finance and RBA data. General information, not advice. Methodology.