We recently published a list of 10 Stocks To Trade Without Tariffs And Interest Rate Fears. In this article, we are going to take a look at where Constellation Brands, Inc. (NYSE:STZ) stands against other stocks to trade without tariffs and interest rate fears.
The Federal Reserve this week decided to keep interest rates unchanged, causing Donald Trump to lash out at the Fed chief. Jerome Powell seemed satisfied with the current state of the economy and the job market. What he did not like was the high uncertainty prevailing in the market.
There’s a good reason why the uncertainty is causing problems for the Fed. It can’t reliably predict the future path of the economy if it doesn’t know what data to put in its models. This is pretty much the same problem that stock analysts have. With tariffs causing problems for American businesses, many investors are seeing their portfolios shrink.
In such a scenario, we decided to look at stocks that are largely protected from both tariffs and interest rates. This ‘protection’ comes from the fact that their bull thesis is unlikely to be impacted by either of these factors.
To come up with the list of stocks protected from tariffs and interest rates, we looked at the recently released list of Goldman Sachs’ top stocks with micro-driven volatility.
A winemaker examining a glass of red wine from a barrel in a cellar.
Constellation Brands, Inc. (NYSE:STZ)
Constellation Brands, Inc. is a producer, marketer, seller, and importer of wine, spirits, and beer. It sells its products to retailers, state alcohol beverage control agencies, wholesalers, on-premise locations, and distributors.
The company’s stock fell 17.09% right after the release of its Q3 earnings as it missed revenue estimates as well as EPS estimates. Despite only a narrow earnings miss, the company reduced its guidance for FY2025 which is what sent the stock crashing. According to the CEO, this reduction in outlook is due to the short-term uncertainty about consumers’ spending behavior.
Another key factor that can have a potential impact on Constellation is tariff as the company’s around 85% of revenues come from Mexican imports. A 25% tariff on Mexican goods would create major pressure on the company’s financials. However, there are chances that Trump might change his mind if Mexico fulfills the expected conditions.
Most importantly, Warren Buffett recently acquired a $1.24 billion stake in the company. Now that he is the sixth largest shareholder in the company, there’s a good chance that the firm will see some upside irrespective of where the economy is headed.
Overall, STZ ranks 6th on our list of stocks to trade without tariffs and interest rate fears. While we acknowledge the potential of STZ as a leading investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. If you are looking for an AI stock that is as promising as STZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
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Disclosure: None. This article is originally published at Insider Monkey.