GPT sees STZ at $3.38, 27% above Street on tax normalization

GPT-5.2 Quant is projecting Constellation Brands (STZ) to significantly beat expectations, forecasting $3.38 EPS versus the $2.66 Street consensus - a 27% premium.

Key Findings

The model notes that consensus appears to be using an outdated or distorted baseline, as the last three reported quarters clustered tightly around $2.46-$2.51B in revenue. GPT projects Q3 revenue remains anchored near $2.5B rather than dropping to consensus's implied $2.16B.

Thesis

The key insight centers on tax and non-operating discretes. Q2 FY26's tax expense was unusually elevated, and GPT expects meaningful normalization in Q3. Additionally, ongoing buybacks continue reducing diluted share count, providing EPS support.

What This Means

This call suggests the Street may be systematically mismodeling STZ's tax dynamics. With Beer stability offsetting Wine & Spirits contraction, the company's earnings power appears underappreciated. Investors focused on headline consensus may be missing this technical setup.