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Friday's Bonus Article Berkshire Bought the Dip—Now Constellation Brands Is ReboundingAuthor: Leo Miller. Posted: 1/9/2026. 
Key Takeaways - 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 disastrous 2025, shares of beer giant Constellation Brands (NYSE: STZ) are starting 2026 on a more positive note. To the chagrin of Berkshire Hathaway (NYSE: BRK.B), Constellation delivered a total return of -36% last year. Berkshire initiated a position in Constellation during Q4 2024, and as of September 2025 held 13.4 million shares, valued near $1.8 billion at the time. Weakness in the beer market and among Constellation's customer base contributed to the stock's decline. Constellation cut its full-year fiscal 2026 (FY2026) guidance in September 2025 because of the challenging environment. Note that the company's fiscal year runs several quarters ahead of the calendar year. While President Trump's official salary is $400,000 per year... his tax returns reveal he's been collecting up to $250,000 PER MONTH from one hidden source. Until recently, most Americans couldn't touch the type of investment that makes up this investment. But thanks to Executive Order 14330, that just changed. If you love investing in disruptive new companies... Discover how to invest in the fund Trump uses to collect this income >> As of the Jan. 8 close, Constellation shares are up more than 7% year-to-date in 2026. The stock has rebounded roughly 16% since hitting a 2025 low near $128 in November, and the company's latest earnings report pushed the shares up 5.3%. Below is a breakdown of that quarter to provide an updated view on the stock. Constellation Delivers Impressive Bottom-Line Beat In Q3 FY2026, Constellation reported net revenue of $2.22 billion, a 10% decline that nonetheless beat analysts by about $52 million. The consumer staples company posted comparable (adjusted) earnings per share of $3.06, down roughly 6% year-over-year but well ahead of consensus estimates of $2.63, which had implied a 19% drop. The beer segment, which accounts for roughly 90% of revenue, saw sales fall 1%. That decline was smaller than the industry average, allowing Constellation to gain market share. Despite a weak backdrop, Constellation's beer business has consistently outperformed: in Q1 and Q2 FY2026 it led the beer category in dollar share gains, as it did in FY2025. Even with lower sales, the beer segment's operating margin rose by 10 basis points, signaling effective cost management. The Wine & Spirits segment dragged on overall growth, with sales down 51% largely due to divestitures, including SVEDKA vodka and parts of the wine portfolio. Excluding those divestments, Wine & Spirits sales fell about 7%. Applying those exclusions companywide, sales growth would have been around -2%, a much better picture than the reported -10% decline. Overall, Constellation's underlying performance in the quarter was stronger than the headline numbers suggest. Coming Off Multi-Year Lows, STZ Could Have Significant Room to Run Trading near $148, Constellation has only moderately recovered from its 2025 low of about $128. That low was the stock's weakest closing level since April 2020 — shortly after the March COVID-19 market crash. In other words, Constellation isn't merely rebounding from a short-term dip; it's starting to recover from a multi-year drawdown, which leaves significant potential for further upside if the trend continues. Berkshire Buys and Price Targets Support Constellation's Potential Berkshire bought more than 6 million Constellation shares in Q1 2025, when the lowest closing price that quarter was $158. That price is roughly 7% above the stock's current level, suggesting Berkshire may have accumulated at prices modestly higher than today's market. Since then, Berkshire has continued to increase its Constellation stake, signaling ongoing confidence despite the stock's decline. That holding, combined with analyst sentiment, points to upside potential: the MarketBeat consensus price target of about $182 implies roughly 23% upside from current levels. That potential faces industry risks. A recent Gallup survey found just 54% of Americans reporting they drink alcohol — the lowest reading on record. However, similar lows have occurred before and later rebounded, suggesting these trends may be cyclical rather than structural. A recovery in alcohol consumption would be a meaningful tailwind for Constellation. Given its track record of beer share gains, solid margin management and a valuation that leaves room for appreciation, Constellation's outlook currently skews to the upside.
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