STZ Value Scorecard - Constellation Brands

Value Scorecard · run 2026-10-18

13 value checks: 12 scored 1 to 5, plus moat evidence

36/60

moderate value score

Earnings & returns

EPS Trend

4/5

Diluted EPS: -$0.11 (2023), $9.39 (2024), -$0.45 (2025), $9.61 (2026). It rose every year but one and ended above 2023; the framework scores that as 4.

ROE Trend

2/5

ROE (net income / common equity): -0.8% (2023), 17.7% (2024), -1.2% (2025), 20.9% (2026). Median 8.4%, lowest -1.2%; the framework scores a median 5-10% as 2.

ROIC

3/5

ROIC of 14.2%: operating income of $2.72B divided by $19.21B of capital (total assets $21.90B minus current liabilities $2.69B), fiscal year to Feb 28, 2026, as filed in the 10-K (SEC EDGAR). The framework scores 10-15% as 3.

Profit Margins

5/5

Net margin of 20.9%; the framework scores above 20% as 5; gross margin 52.8%, operating margin 33.6%.

Balance sheet & cash

Debt-to-Equity

3/5

Debt-to-equity of 1.16; the framework scores 0.8-1.5 as 3 (total debt $10.32B, total cash $98.50M).

Free Cash Flow

3/5

Free cash flow (operating cash flow minus capital expenditure): $1.72B (2023), $1.51B (2024), $1.94B (2025), $1.79B (2026). It ended above 2023 but did not rise in 2 of 3 years; the framework scores that as 3.

Retained Earnings

4/5

Retained earnings, as filed in the 10-Ks (SEC EDGAR): $12.34B (2023), $13.42B (2024), $12.60B (2025), $13.57B (2026). It rose every year but one and ended above 2023; the framework scores that as 4.

Valuation models

Graham IV

2/5

IV = EPS x (8.5 + 2g) x (4.4 / Y) = $11.17 x (8.5 + 2 x 1.2) x (4.4 / 4.5) = $119.05. Current price $131.35; price is 10.3% above the model value.

DCF Value

1/5

FCF/share = $6.610, stage 1 growth = 0.0% (revenue CAGR -4.2% floored at 0%; the company is valued as if it does not grow rather than extrapolating the decline) for 5 years, terminal growth = 3%, discount rate = 10%. Stage 1 PV = $25.06, PV of terminal value = $60.39, DCF value = $85.45. Current price $131.35; price is 53.7% above the model value.

Margin of Safety

2/5

Graham value $119.05 (price is 10.3% above the model value); DCF value $85.45 (price is 53.7% above the model value).

Price-to-Book

3/5

P/B of 2.60; the framework scores 1.5-3.0 as 3.

Business quality

Moat Evidence

Not scored

A moat (a brand, a network, switching costs, patents, scale, a licence) is not a number in the filings, so Valerius doesn’t score it. Below are the figures and the words moat analysis starts from, from the company’s own 10-K filings. The conclusion is yours.

Return on capital, each year

Above 15% in 0 of 10 years (2017-2026); lowest 2.0%, highest 15.0%.

Gross margin, each year

Between 48.1% and 53.4% over 10 years (a range of 5.3 points).

Competition, in the company’s own words · 10-K filed Apr 22, 2026

The beverage alcohol industry is highly competitive. We compete on the basis of quality, price, brand recognition and reputation, and distribution strength. Our products compete with other alcoholic and non-alcoholic beverages for consumer purchases, as well as shelf space in retail stores, restaurant presence, and wholesaler attention. We compete with numerous multinational producers and distributors of beverage

The opening of the company’s “COMPETITION” section in its 10-K, quoted word for word, not summarized or edited. It is the company’s own description, not Valerius’s view, and may include the company’s expectations. Open the filing.

Return on capital = operating income / (total assets − current liabilities), the ROIC row’s definition; 15% is the framework’s return threshold. Gross margin = gross profit / revenue. Both from each year’s 10-K via SEC EDGAR. Moat analysis commonly looks at whether returns and margins held up over many years. These figures don’t say whether the company has an advantage, what it is, or whether it will last.

Capital Allocation

4/5

Capital allocation, 2023-2026: dividends or buybacks paid in every year (pass); $8.19B paid out against $6.96B of free cash flow (fail: paid out more than free cash flow); total debt $12.96B to $11.20B, down 13.6%, 3.5x EBITDA (pass: not up more than 10%); shares outstanding 0.18B to 0.17B, down 5.7% (pass). 3 of 4 tests passed; the framework scores that as 4.

Filings

Company notices to the SEC

Not scored

Three kinds of event the company reported to the SEC in the last 5 years, from its filings on SEC EDGAR.

These are events the company reported to the SEC. An auditor change or a late filing can have many causes; each date links to the filing, where the company explains it. Valerius does not score these.

How the Graham and DCF values were calculated

  Graham Formula:
    IV = EPS x (8.5 + 2g) x (4.4 / Y)
    EPS = $11.17, g = 1.2%, Y = 4.5
    IV = $119.05
    Current price $131.35 vs Graham value $119.05 — price is 10.3% above the model value.

  DCF:
    FCF/share = $6.610
    Stage 1 growth = 0.0% for 5 years | terminal growth = 3.0% | discount rate = 10.0%
    Stage 1 g floored at 0.0% (3-year revenue CAGR was -4.2%; the company is valued as if it does not grow rather than extrapolating the decline)
      Y1: $6.610 → PV $6.009
      Y2: $6.610 → PV $5.463
      Y3: $6.610 → PV $4.966
      Y4: $6.610 → PV $4.515
      Y5: $6.610 → PV $4.104
    Stage 1 PV sum = $25.06
    Terminal value at end of Y5 = $97.26
    PV of terminal value = $60.39
    DCF value = $85.45
    Current price $131.35 vs DCF value $85.45 — price is 53.7% above the model value.

Data from yfinance summary figures and financial statements, and from the company’s 10-K filings via SEC EDGAR; computed at a price of $131.35. Every score is calculated from the figures by the framework’s fixed rules, and the explanation beside it is generated from the same figures: Graham value, DCF value, margin of safety, ROIC, profit margins, debt-to-equity, price-to-book, EPS trend, ROE trend, free cash flow, retained earnings and capital allocation. No AI is involved in this scorecard. The moat is shown as evidence, without a score. Read each score with the figures beside it. Intrinsic value calculations are model outputs based on stated assumptions, not predictions.

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