Constellation Brands, Inc. (STZ) Intrinsic Value & DCF Valuation
Beverages - Alcoholic · NYSE
Current Price
$118.39
Intrinsic Value
$111.68
-6.0% margin of safety
What Is Constellation Brands, Inc.'s Intrinsic Value?
As of 2026-10-07, the base-case DCF model estimates the intrinsic value of Constellation Brands, Inc. (STZ) at $111.68 per share, compared with a market price of $118.39, a margin of safety of -6.0%. The base case assumes 4.9% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $93.12 to $132.86. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Constellation Brands, Inc. (STZ) Undervalued?
At $118.39, STZ trades about 6.0% above the base-case intrinsic value estimate, a modest premium. By this model the price sits within a normal band, though faster growth than assumed would change the picture.
COMPETITIVE MOAT
↑Dominant Beer Portfolio
Constellation Brands holds leading market share in the U.S. premium beer segment with brands like Modelo and Corona. This strong brand recognition and consumer loyalty create significant barriers to entry for competitors.
↑Extensive Distribution Network
The company possesses a vast and established distribution network across the U.S. This allows for efficient product placement and accessibility, making it difficult for smaller players to compete on scale.
↑Premiumization Strategy Success
Constellation's focus on premium and high-end brands resonates with evolving consumer preferences. This strategic shift drives higher margins and strengthens its competitive position in a growing market segment.
INVESTMENT RISKS
↓Regulatory Environment Changes
The alcoholic beverage industry is heavily regulated. Changes in excise taxes, marketing restrictions, or distribution laws could negatively impact profitability and market access.
↓Intense Competition
The beer and spirits market is highly competitive, with both large global players and nimble craft producers vying for market share. Aggressive pricing and marketing by rivals pose a constant threat.
↓Supply Chain Disruptions
Global supply chain issues, including ingredient sourcing, production, and transportation, can affect Constellation's ability to meet demand and manage costs. This can lead to stockouts or increased operational expenses.
Base case
STZ base case valuation
Intrinsic Value
$111.68
Margin of safety
-6.0%
Expected annual return
-1.2%
Base case assumptions: 4.9% annual growth, 10.0% discount rate, 28.29x exit multiple, 5 year projection. Data as of 2026-10-07.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the STZ valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Constellation Brands, Inc. respond.
Open DCF Calculator for STZCompany Overview
Constellation Brands, Inc., together with its subsidiaries, produces, imports, markets, and sells beer, wine, and spirits in the United States, Canada, Mexico, New Zealand, and Italy. The company offers beer under the Corona Extra, Corona Familiar, Corona Hard Seltzer, Corona Light, Corona Non-Alcoholic, Corona Premier, Corona Refresca, Modelo Especial, Modelo Chelada, Modelo Negra, Modelo Oro, Victoria, Vicky Chamoy, and Pacifico brands. It also offers wine under the Cook’s California Champagne, Kim Crawford, Meiomi, Mount Veeder, Ruffino, SIMI, My Favorite Neighbor, Robert Mondavi Winery, Schrader, and The Prisoner Wine Company brands; and spirits under the Casa Noble, Copper & Kings, High West, Mi CAMPO, Nelson’s Green Brier, and SVEDKA brands. The company provides its products to wholesale distributors, retailers, on-premise locations, and state alcohol beverage control agencies. Constellation Brands, Inc. was founded in 1945 and is based in Rochester, New York.
Financial Metrics — STZ Stock Valuation Data
Revenue/Share (TTM)
$54.02
FCF/Share (TTM)
$4.19
ROIC (TTM)
12.0%
ROE (TTM)
23.4%
P/FCF
27.7x
EV/EBITDA
6.2x
FCF Yield
3.53%
Debt/Equity
0.01x
On a trailing twelve-month basis, STZ generates free cash flow per share of $4.19 alongside a ROIC of 12.0%, both central inputs for a DCF valuation. Its P/FCF ratio of 27.7x and FCF yield of 3.53% then frame how STZ is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of STZ?
Constellation Brands, Inc. currently generates $4.19 in free cash flow per share. At the current price of $118.39, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is STZ undervalued?
STZ trades at a P/FCF ratio of 27.7x with a free cash flow yield of 3.53%. This P/FCF is in a moderate range. However, whether STZ is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value STZ stock using DCF?
To perform a DCF valuation on Constellation Brands, Inc.: (1) Start with the trailing free cash flow per share ($4.19) as the base, (2) project future FCF growth over 5-10 years based on Beverages - Alcoholic industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting STZ's risk profile — with a debt-to-equity of 0.01x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to STZ?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Constellation Brands, Inc., this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Beverages - Alcoholic trends, then discounting those amounts to today's dollars. STZ's ROIC of 12.0% shows moderate capital returns.
How does WACC affect STZ stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For STZ, with a debt-to-equity ratio of 0.01x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 6.2x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See STZ PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Defensive valuationsDCF and P/E value STZ with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-10-07. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.