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Special Report Berkshire Bought the Dip—Now Constellation Brands Is ReboundingAuthor: Leo Miller. Posted: 1/9/2026. 
Summary - 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 brighter 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. 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 period 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 company’s latest earnings report also sent shares up 5.3%. Here's a look at the results to gain an updated perspective on the stock. Constellation Delivers Impressive Bottom-Line Beat In Q3 FY2026, Constellation reported net revenue of $2.22 billion. That was a 10% decline, but about $52 million better than analysts expected. The consumer staples company reported comparable earnings per share of $3.06, down roughly 6% from a year earlier but well ahead of consensus estimates of $2.63 (which had implied a 19% drop). The company’s beer segment, which accounted for 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, Constellation’s beer business has consistently outperformed: in Q1 and Q2 FY2026, Constellation led the beer category in dollar share gains, and that trend also held true in FY2025. Although sales slipped, the beer segment's operating margin ticked up by 10 basis points, reflecting effective cost management. The firm’s Wine and Spirits segment weighed on overall growth, with reported sales down 51%. That large drop was primarily due to Constellation’s divestment of SVEDKA vodka and part of its wine portfolio; on a comparable basis excluding those items, sales fell about 7%. Extending those exclusions across the company, sales growth would be roughly -2%—significantly better than the headline -10% figure. Overall, Constellation performed solidly during the quarter. Coming Off Multi-Year Lows, STZ Could Have Room to Run Trading around $148, Constellation has only modestly recovered from its 2025 low near $128. That November low was not just a short-term trough; it was Constellation’s lowest level since April 2020, shortly after the COVID-19 market crash in March of that year. In other words, Constellation isn’t just rebounding from a near-term dip—it is climbing out of a multi-year drawdown. That dynamic gives the rally meaningful upside potential if the recovery continues. Berkshire Buying and Price Targets Support the Upside Berkshire bought more than 6 million Constellation shares in Q1 2025. In that quarter, Constellation’s lowest closing price was $158, which is roughly 7% above the stock’s current price—meaning Berkshire may have paid more than the market value today for some of its shares. Since Q1 2025, Berkshire has increased its stake in Constellation, signaling continued confidence despite the stock’s setbacks. That institutional backing bolsters the bullish case. Wall Street analysts also see upside. The MarketBeat consensus price target of about $182 implies roughly 23% upside from current levels. Still, the beer industry faces notable headwinds. A recent Gallup survey found just 54% of Americans reported drinking alcohol—the lowest figure on record. However, that rate has fallen to similar lows before and later rebounded, suggesting alcohol consumption trends may be cyclical rather than structural. A broad recovery in drinking habits would be a strong tailwind for Constellation. Weighing Constellation’s consistent beer-share gains, recent earnings outperformance and its valuation, the company's outlook currently skews to the upside—though industry trends and execution risk remain important factors for investors to monitor.
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