STZ - Constellation Brands is called more recession-proof than peers by Evercore ISI

Evercore ISI is still bullish on Constellation Brands ( NYSE: STZ ) despite concerns in the beverage industry over consumer spending trends.

The firm sees ample runway for the Modelo and Pacifico brands. In particular, the Pacifico brand is tipped to be the third major national brand family for the beverage giant, which could extend the duration of the STZ growth story.

Overall, STZ’s penetration levels are noted to be higher than peers for high income consumers, which is seen helping insulate the brand from a significant slowdown if consumer wallets become stretched and trading down takes place with lower income cohorts.

"We continue to believe that STZ is well-positioned to deliver HSD beer net sales growth over the next few years, driven by demographic tailwinds, distribution opportunities, line extensions, general market penetration for Modelo Especial, and continued premiumization trends across the alcohol segment."

Evercore ISI has an Overweight rating and price target of $285.

Read a preview of Constellation Brands' upcoming earnings report.

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