We recently compiled a list of the 10 Best Alcohol Stocks To Buy According to Analysts. In this article, we are going to take a look at where Constellation Brands, Inc. (NYSE:STZ) stands against the other alcohol stocks.
An analysis by Goldman Sachs has revealed that beer and spirits volumes in the American market have shown little correlation with economic growth. This is because beer and spirits are often seen as affordable luxuries or even staples. Liquor tends to enjoy stable sales even when general consumer spending takes a hit elsewhere, while there have also been times when alcohol sales even increase during economic downturns, as they did during the COVID-19 pandemic and the Great Recession of 2008-09.
READ ALSO: 10 Best Liquor Stocks To Buy According to Short Sellers
However, things haven’t been exactly easy for the alcohol sector lately, especially after the recent report from the U.S. Surgeon General claimed that alcohol consumption in the country is directly linked to approximately 100,000 cases of cancer and 20,000 deaths annually. The report has proposed to put cancer warning labels on alcoholic beverages, signaling a shift toward more aggressive tobacco-style regulation for the sector if adopted.
The proposition, if enacted, could seriously hurt sales for a sector that is already struggling with a pullback in drinking by younger consumers. According to the National Institute on Alcohol Abuse and Alcoholism, America’s per capita annual consumption of alcohol in 2022 was 2.5 gallons, down from 3.28 gallons in the early 1980s. The growing popularity of low-and no-alcohol products, rising prevalence of cannabis use, and anti-obesity drugs picking up steam certainly haven’t helped either.
Another looming threat for the American liquor industry is that of tariffs. The European Union is due to reimpose its retaliatory tariff on American whiskey in late March, but at a higher rate of 50%. Over the last two years, American whiskey exports to the EU have surged by more than 60%, and total US spirits exports grew to a record high of $2.2 billion in 2023. But this success story could face a devastating turn unless President Trump’s administration can swiftly negotiate a prolonged suspension or permanent removal of the tariff.
However, amidst the sharp decline in sales following the pandemic, one category that could be a bright spot for the struggling booze industry is that of spirit-based RTD’s, despite the fall in the overall spirits segment. Americans consumed over 62 million cases of ready-to-drink spirits in 2023, up almost 25% from 2022, making it the second-largest spirit category by volume, right behind vodka. A plethora of new brands have popped up in the market over the last few years, offering canned versions of many bar classics, including Negroni, Daiquiri, and even the good ol’ Jack & Coke.
The alcohol sector also seems to be responding adequately to the evolving consumer trends by investing heavily in a wide range of low- and no-alcohol beverages. The strategy seems to be paying off, as according to Nielsen, non-alcoholic beer, wine, and spirits collectively surpassed $565 million in sales in 2023, up 35% from the year before. Sales of Guinness 0.0, the zero-alcohol version of the highly beloved Irish stout, surged by nearly 50% between February 2023 and February 2024, putting it among the Best Selling Non Alcoholic Beers in the US. Nearly every major industry player has come up with No-Lo versions of their highly acclaimed brands, making sure they don’t miss out on their share of a market that is becoming more and more established every day.
Methodology:
To collect data for this article, we examined all the companies in the alcohol sector that are listed on NASDAQ and NYSE and then compiled a list of the stocks with the highest upside potential according to Wall Street analysts, as of January 27, 2024. Following are the Best Alcohol Stocks According to Analysts.
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A winemaker examining a glass of red wine from a barrel in a cellar.
Constellation Brands, Inc. (NYSE:STZ)
Stock Upside Potential: 29.86%
The New York-based Constellation Brands, Inc. (NYSE:STZ) is involved in the production, import, marketing, and sale of beer, wine, and spirits. The company recently made headlines when its Mexican beer brand, Modelo Especial, became the Best-Selling Beer in America after dethroning Bud Light.
The sales gap between the two brands has only widened further since then and Constellation Brands, Inc. (NYSE:STZ)’s beer business has continued to flourish. The company’s beer segment achieved a net sales increase of 3% in Q3 of 2025, supported by higher shipment volumes. Its core brands continued their uptick during the quarter as Modelo Especial grew by 3%, while Pacifico also surged by 20% and remained the number four dollar share gainer across the total beer category. However, STZ’s iconic Corona Extra brand experienced a slight decline due to adverse weather conditions in the Northeast.
Constellation Brands, Inc. (NYSE:STZ) could stand to lose big from Donald Trump’s presidency, as the President has announced to slap 25% tariffs on imports from Mexico, and Constellation’s high reliance on Mexican beer imports could become a serious problem. However, the company made sure that it had adequate inventory in place before any such tariffs were finalized. It is also assessing cutting costs elsewhere to absorb the blanket tariffs, or incrementally raising its prices, but that will carry its own risks.
Constellation Brands, Inc. (NYSE:STZ) is making sure it can keep up with the increasing demand for its brews and is investing approximately $3 billion through fiscal 2028 to expand its production facilities in Mexico. However, the overall US beer category is witnessing slow growth and the low consumer spending has forced Constellation to cut its sales and profits forecasts for fiscal year 2025. The company now expects annual net sales to grow 2% to 5%, against its previous forecast of 4% to 6% growth.
Constellation Brands, Inc. (NYSE:STZ) has also been included in our list of the 8 Best Beer Stocks to Buy Now.
Overall STZ ranks 6th on our list of the best alcohol stocks to buy according to analysts. While we acknowledge the potential for STZ as an 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 more promising than STZ but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article is originally published at Insider Monkey.
