Constellation Brands' Strong Earnings Offset Sales Decline

Constellation Brands (STZ) saw lower sales in Q1 2026, but maintained free cash flow guidance. Despite a decline in beer sales, FCF increased 41% YoY. Full-year guidance projects FCF between $1.5B and $1.6B. Analysts predict EPS of $12.66 this year, reaching a target price of $219.37 per share, signaling STZ as undervalued.

To play STZ, consider selling short out-of-the-money put options like the $165 strike price, providing an immediate yield. This strategy allows setting a lower potential buy-in point if the stock drops. The expected return can be over 5% if repeated monthly, offering a way to profitably play the undervalued STZ stock.

Read more at Yahoo Finance: Constellation Brands Stock is Down But Produced Good Earnings