Constellations Brands issued a press release on its quarterly results before markets opened.
![](http://midgardfinance.com/companies/S/STZ/brands1.jpg)
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Canopy equity loss
All segments performed well in terms of both shipment volume, revenue and profit.
![](http://midgardfinance.com/companies/S/STZ/STZ2019Q2.png)
But due to continued Canopy equity losses Constellation Brands yet again reported negative earnings for the quarter. The announcement of a positively revised outlook in terms of operating earnings was overshadowed by this.
Constellation’s share of Canopy Growth’s equity losses and related activities for second quarter fiscal 2020 totaled a loss of $484.4 million, including the impact from the June 2019 warrant modification, on a reported basis and a loss of $54.7 million on a comparable basis. Constellation has recognized a $757 million unrealized net gain in reported basis results since initial Canopy investment in November 2017; $839 million decrease in the fair value of Canopy investments was recognized for second quarter fiscal 2020.
![](https://www.midgardfinance.com/10q10k/S/STZ/us-gaap.Goodwill__.png)
![](https://www.midgardfinance.com/10q10k/S/STZ/us-gaap.IntangibleAssetsNetExcludingGoodwill__.png)
Valuation
At a forward P/E just above 20 it is not particularly attractively priced. Like distillers Brown Forman [BF-B] and Diageo [DEO] it is somewhat overpriced. An alternative investment could be AB InBev [BUD], which is somewhat more attractively valued compared to smaller brewery rivals Heineken [HEAIS.AS], Carlsberg [CARL-B.CO], Molson Coors [TAP], The Boston Beer Company [SAM] and Constellation Brands. AB InBev just like Constellation Brands have better operating margins than most competitors.
![](https://www.midgardfinance.com/plot/price/_/wineriesdistilleries_evo_2010-01-01.png)
![](https://www.midgardfinance.com/plot/price/_/breweries_evo_2010-01-01.png)
![](https://www.midgardfinance.com/plot/fundamentals/_/wineriesdistilleries_operatingMargin_sumFalse_2019-10.png)
![](https://www.midgardfinance.com/plot/fundamentals/_/breweries_operatingMargin_sumFalse_2019-10.png)
References
Reuters – Corona maker Constellation hit by pot investment loss; shares drop