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US: Legg Mason raises Constellation estimates

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Legg Mason has lifted its first quarter earnings per share estimates for Constellation Brands, to US$0.30 from US$0.29. The equity analysts also raised its full-year estimate to US$1.60 from US$1.59, reflecting an increase in estimated growth in premium alcohol products in the US. 

In a research note, analyst Mark Swartzberg said: "Specifically, we have lifted our Corona shipment to up 6% from up 2% and our spirits revenue estimate to up 6% from up 4%."

He continued: "Multiple trade sources point to accelerating Corona growth in contrast with continued weakness in domestic brews. Brand pricing also appears to be sound in an increasingly promotional beer market, and we believe the brand's unique position and equity supports continued pricing discipline and volume outperformance. We also believe the company's new premium vodka, Effen, is performing ahead of plan."
 
Legg Mason said it recommended "opportunistic buying on days of trading weakness."

"Our 12-month target price is $31.50 per share, and anticipates the shares will maintain forward multiples and perform inline with profit growth," Swartzberg said.


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