Constellation Brands Inc. (NYSE: STZ) stock is up 2.4% in early trading after the adult beverages company reported a double beat in its fourth quarter 2023 earnings report. Revenue of $2.14 billion topped estimates for $2.10 billion. But it was the earnings per share (EPS) that got the most attention. Constellation delivered $2.26 EPS, 7.5% higher than the expected $2.10 EPS.  

Before the earnings report, STZ stock was up 9.4% in 2024, which is higher than the 8.2% gain for the S&P 500 and significantly higher than many other consumer staples stocks. Investors should expect more of the same for STZ stock going forward. That's supported by bullish guidance from the company, which is forecasting full-year EPS for 2025 in a range between $13.50 and $13.80 per share compared to the consensus estimate of $13.43.  

The Anti-Boycott Brand Continues to Roll On 

The company cited increased sales of its Modelo brand beer as a critical reason for the revenue and earnings growth. The brand overtook Bud Light in June 2023 to become America's Most Popular Beer brand. That reflected the backlash and subsequent boycott of Anheuser-Busch InBev (NYSE: BUD), specifically the company's Bud Light brand.  

If these results are any indication, consumers will continue to favor the Modelo brand. The company reported 14% depletion growth for the Modelo Especial brand and 22% depletion growth for its Pacifico brand. 

Constellation Brands also said its operating margin for the beer business jumped by 30bps to 34.4% of sales. That's particularly impressive since the company has to offset higher packaging and raw materials costs.  

Inflation is Impacting Consumer Tastes 

Not everything in the report was ideal for Constellation Brands. The company reported that wine and spirits sales were down 6%, citing "unfavorable marketplace dynamics" that continued to pressure volumes. The company said the change was most noticeable in its largest premium brands. 

This isn't surprising given that when money gets tight, consumers trade down to beer, which is generally less expensive than wine and spirits.  

Analysts Gave Investors a Bullish Hint 

Before the earnings report, analysts were sending off bullish signals about STZ stock. The Constellation Brands analyst ratings on MarketBeat show that in April alone, Barclays and Wedbush reiterated their Overweight or Outperform ratings, respectively. Both of those are the equivalent of a Buy. Both agencies have a price target higher than the consensus price of $292.78, with Wedbush coming in at $300.  

All Signs Point to a New Record High 

STZ stock hit a record high in June 2023. After a sharp pullback that followed the broader market, the stock fell just short of that high before its recent pullback. But right now, the analyst ratings and the company's internal projections are aligning to send STZ to a new record high. 

Of course, it's tricky to account for inflation and how that may affect consumer spending. However, in addition to the growth in the STZ stock price, investors have another reason to own Constellation Brands stock. That comes by way of the company's dividend. Constellation Brands announced a quarterly dividend of $1.01, a 13% increase. It's also the fourth consecutive year the company has increased its dividend.