UPDATE: Stifel Raises Price Target On Constellation Brands On Positive Risk/Reward

In a report published Friday, Stifel analyst Mark Swartzberg reiterated a Buy rating on Constellation Brands, Inc. (NYSE: STZ), and raised the price target from $111.00 to $135.00.

In the report, Stifel noted, “We lift our target to $135 per share from $111 per share and offer takeaways below, from the earnings-related call and from our work on the potential for glass savings this year, i.e., before the glass joint venture is built out from one furnace to four furnaces by late 2018. We continue to recommend the shares, seeing a positive risk/reward due to sound multiples and superior U.S. growth in a stable, cash-generative category. Our higher target is partly due to higher estimated earnings but mainly due to our belief the forward P/E will expand to an approximate 25% premium to the XLP, or approximately 24.1x FY2017E EPS of $5.62 (was $5.53), versus an average 10% since the Modelo transactions. We expect sustained beer revenue growth in the high single digits to drive the expansion.”

Constellation Brands closed on Thursday at $107.64.