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Exclusive Content Berkshire Bought the Dip—Now Constellation Brands Is ReboundingReported by Leo Miller. Article Posted: 1/9/2026. 
Key Points - 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 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 across 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 the company's fiscal year is 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 up 5.3%. Below, we break down Constellation's latest results to provide an updated perspective on the stock. Constellation Delivers an Impressive Bottom-Line Beat In Q3 FY2026, Constellation reported net revenue of $2.22 billion, a 10% decline but roughly $52 million ahead of analysts' estimates. The company reported comparable earnings per share of $3.06, down about 6% year-over-year but well above the consensus of $2.63, which implied a 19% decline. Constellation's beer segment—about 90% of revenue—saw sales fall 1%. That decline was smaller than the rest of the beer industry, allowing Constellation to gain market share. Amid a weak backdrop, the company's beer business has consistently outperformed: in Q1 and Q2 FY2026 Constellation led the beer category in dollar share gains, a trend that held true in FY2025. Despite the sales decline, the beer segment's operating margin rose 10 basis points, signaling effective cost management. Drag on overall growth came from the Wine and Spirits segment, where sales fell 51%, largely due to Constellation's divestment of SVEDKA vodka and parts of its wine portfolio. Excluding those divestments, Wine and Spirits sales declined about 7%. On an organic basis (excluding those portfolio changes), companywide sales fell approximately 2%, which is materially better than the reported 10% drop. Overall, Constellation performed defensibly during the quarter. Coming Off Multi-Year Lows, STZ May Have Significant Upside Trading around $148, Constellation has only partially recovered from its 2025 low near $128. That low was its weakest level since April 2020—shortly after the March COVID-19 market crash—so the stock is recovering from a historic drawdown rather than merely a short-term trough. That context suggests meaningful upside potential if the recovery continues. Berkshire Purchases and Price Targets Support the Bull Case Berkshire bought more than 6 million Constellation shares in Q1 2025. During that quarter the stock's lowest closing price was $158, roughly 7% above current levels, suggesting Berkshire acquired a meaningful stake at prices modestly higher than today's. Berkshire has since increased its holdings, indicating continued conviction even as the stock fell. Wall Street analysts also see upside. The MarketBeat consensus price target of about $182 implies roughly 23% upside from current prices. That upside isn't without risk. A recent Gallup survey found just 54% of Americans reported drinking alcohol—the lowest on record. Still, historical patterns show the drinking rate has fallen to similar levels before rebounding, suggesting the trend may be cyclical rather than structural. A recovery in consumption would be a meaningful tailwind for Constellation. Given the company's consistent beer share gains, its margin resilience and the valuation upside implied by analyst targets and institutional buying, Constellation's outlook currently skews positive.
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