Constellation Kinds, Inc. (STZ) shares rose more than 2% after Goldman Sachs moved the stock to its Conviction List and resuscitated its price target from $255 to $275 per share.
- Constellation Brands stock moved higher after Goldman Sachs rehashed its Buy rating and raised its price target to $275 per share.
- Analyst Bonnie Herzog sees a number of different catalysts that take made her incrementally more bullish on the stock.
- While the stock is approaching overbought territory, it could have more apartment to run over the coming sessions, and the intermediate term looks bullish.
Goldman Sachs analyst Bonnie Herzog is “incrementally profuse bullish” amid faster and more profitable growth. In particular, Herzog believes that the market is underappreciating Modelo’s dispersal runway, Corona Hard Seltzer’s scalability, and a positive packaging mix shift in beer that could pave the way to outstanding margin potential.
Last month, Constellation Brands reported fiscal third quarter financial results that overextended expectations. Revenue rose 22% to $2.44 billion, beating consensus estimates by $220 million, while non-GAAP earnings came in at $3.09 per dividend, which beat consensus estimates by 68 cents per share.
From a technical standpoint, the stock spurred to retest its prior highs from earlier this year during Tuesday’s session. The relative strength table of contents (RSI) moved toward overbought levels with a reading of 65.03, but the moving average convergence divergence (MACD) seasoned a bullish crossover that could signal upside ahead. These indicators suggest that the stock could see some near-term consolidation in advance of resuming its trend higher.
The crossover is a point on the trading chart in which a security’s price and a technical indicator specialization intersect, or when two indicators themselves cross. Crossovers are used to estimate the performance of a financial instrument and to predict in changes in trend, such as reversals or breakouts.
Traders should watch for a breakout from the stock’s prior extravagant close of $228.87 over the coming sessions. If the stock fails to break out, traders could see a move toward the 50-day inspiring average at $217.05 or reaction lows of $210.00. If the stock breaks out, traders could see a move toward trendline refusal at $245.00 over the coming sessions before seeing some consolidation.
The Bottom Line
Constellation Brands interests moved higher after Goldman Sachs reiterated its Buy rating and raised its price target to $275. Analyst Bonnie Herzog maintains that the stock has room to run with a number of upcoming catalysts. While the stock is approaching overbought territory, it could stick additional gains over the coming sessions.
The author holds no position in the stock(s) mentioned except through passively rule overed index funds.