Constellation Brands (STZ) PT Raised to $255 at Morgan Stanley Following 2Q

Morgan Stanley analyst Dara Mohsenian raised the price target on Constellation Brands (NYSE: STZ) to $255.00 (from $251.00) while maintaining a Overweight rating following the company's 2Q. Following the Q2 EPS beat and raised FY19 guidance, Morgan Stanley increased FY19 EPS estimates by ~1% to $9.46 (from $9.36) to reflect a lower tax rate, while FY20 EPS estimates of $10.12 remains unchanged.

Against weak Staples sector performance, STZ's stock rose ~5% following its 2Q19 print, as strong ~10% Q2 beer depletion growth (albeit at the low-end of expectations), bullish management commentary around its innovation pipeline, and better than expected gross margin performance catalyzed the stock higher against somewhat subdued expectations.

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