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Exclusive Content Berkshire Bought the Dip—Now Constellation Brands Is ReboundingWritten by Leo Miller. Publication Date: 1/9/2026. 
In Brief - Constellation Brands is rebounding sharply in early 2026 after a 36% loss last year, with its Q3 earnings beating expectations.
- Berkshire Hathaway increased its stake in STZ despite the stock’s downturn, signaling long-term confidence in its recovery potential.
- Strong beer segment performance, improving margins, and analyst price targets point to upside, even as broader alcohol demand remains uncertain.
After a difficult 2025, shares of beer giant Constellation Brands (NYSE: STZ) are starting 2026 on a much brighter note. To the chagrin of Berkshire Hathaway (NYSE: BRK.B), Constellation delivered a total return of -36% last year. Prior to Warren Buffett's retirement, Berkshire initiated a position in Constellation during Q4 2024. As of September 2025, Berkshire held 13.4 million Constellation shares, valued near $1.8 billion at the time. General weakness in the beer market and among Constellation’s customer base contributed to the stock’s decline. Constellation lowered its full-year fiscal 2026 (FY2026) guidance in September 2025 because of the difficult environment it faces. Note that the firm’s fiscal year runs several quarters ahead of the calendar year. However, as of the Jan. 8 close, Constellation shares were up more than 7% in 2026. The stock has rebounded roughly 16% since hitting a 2025 low near $128 in November. The firm’s latest earnings report also pushed shares higher — up about 5.3%. Below, we break down Constellation’s most recent results to give an updated view of the stock. Constellation Delivers Impressive Bottom-Line Beat In Q3 FY2026, Constellation reported net revenue of $2.22 billion, a 10% decline but roughly $52 million above analysts’ expectations. The consumer staples company reported comparable earnings per share of $3.06 — down about 6% year over year, but well ahead of consensus estimates of $2.63 (which implied a 19% drop). The company’s beer segment, which accounts for roughly 90% of revenue, saw sales decline 1%. That performance was better than the broader beer industry, allowing Constellation to gain share. Across a weak backdrop, Constellation’s beer business has consistently outperformed. In Q1 and Q2 FY2026, Constellation led the beer category in dollar share gains, and that outperformance also held true in FY2025. Despite the sales decline, the beer segment’s operating margin rose by 10 basis points, indicating solid cost management. Pulling down overall growth was the Wine & Spirits segment, where reported sales fell 51% — largely due to the divestiture of SVEDKA vodka and part of the wine portfolio. Excluding those divestitures, segment sales fell about 7%. On a pro forma basis that removes those items for the whole company, sales were down 2% versus the reported -10%. Taken together, Constellation delivered a reasonably strong quarter given the industry backdrop. Coming Off Multi-Year Lows, STZ Could Have Room to Run Trading around $148, Constellation has only recovered modestly from its 2025 low near $128. That low wasn’t just the stock’s weakest level last year — it was the lowest since April 2020, shortly after the market turmoil tied to the COVID-19 selloff in March 2020. In other words, Constellation is bouncing back from a historic drawdown, not just a short-term dip. That dynamic leaves meaningful upside if the recovery continues. Berkshire Buys and Price Targets Support Constellation’s Potential Berkshire bought over 6 million Constellation shares in Q1 2025, when the lowest closing price that quarter was $158 — roughly 7% above the stock’s current level. Since then, Berkshire has increased its Constellation stake, underscoring its continued conviction even as the share price fell. That activity suggests Berkshire still sees upside potential for the company. Analysts also see upside: the MarketBeat consensus price target of about $182 implies roughly 23% upside from current levels. Still, the industry faces meaningful questions. A recent Gallup survey found just 54% of Americans report drinking alcohol — the lowest figure on record. Similar lows have occurred before and later rebounded, suggesting the recent drop may be cyclical rather than structural. If consumption rebounds, the beer industry would benefit and Constellation would be a clear beneficiary. Combined with the company’s track record of beer segment share gains and its current valuation, Constellation’s outlook tilts to the upside.
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