Ballast Point Acquisition Pays off for Constellation Brands

ballast point

Constellation Brands (NYSE:STZ) released its Q3 earnings Thursday and the results were very positive. The New York based Beer, Wine, and Spirits manufacturer continues to beat analyst’s estimates, and has trumped EPS estimates in the last 5 quarters. Constellation delivered an EPS of $1.42 per share, eclipsing analyst’s estimates by 11 cents. Revenue came in at $1.64B, a 6.5% increase y/y and the company has raised its earnings guidance for the upcoming year. STZ stock saw a 4.5% increase on the news it in an extremely volatile market.

Constellation has been one of the best performing stocks in the S&P 500 consumer index for the fourth consecutive year. Many analysts have the company as a top pick for 2016. STZ is seeing a gain in market share in the industry with solid sales growth in its Corona Extra and Modelo brands. To keep up with demand, the company has announced a $1.5B brewery on the border of California in Mexicali.

STZ Chart

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Constellation Brands produced one of the top beer industry headlines of 2015 with a record breaking acquisition of San Diego based Ballast Point Brewing Company for $1B. This was the largest acquisition ever for a craft beer company. Leverage Equity covered Ballast Point in our article Ballast Point: From IPA to IPO when the company was destined to be the first craft beer company to go public. It was one week later that Constellation Brands decided to go ahead and make the record breaking acquisition. The rapid rise in popularity of India Pale Ales (IPA) has led to the fast growth Ballast Point has experienced.

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