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Constellation Brands' Valuation Suggests Unrealistic Expectations

Global alcoholic beverage giant Constellation Brands (STZ) has certainly seen its stock live up to the name, shooting towards the heavens for years now. The company has seen strong operating results as margins and revenue have gained in the past few years and the stock speaks for itself. In light of what appears to be a bubble forming in alcoholic beverage stocks, however, is STZ still a value at its highs? In this article I'll take a look at STZ to see if it's still worthy of your investment dollars at $112.

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To do this, I'll use a DCF-type model you can read more about here. The model uses inputs including earnings estimates from Yahoo!, dividends, which I've set to zero forever and a discount rate, which I've set at the 10-year Treasury rate plus a risk premium of 6.5%.

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