Jim and Jeff say this surging beer stock still looks cheap on a cash-flow basis. Become a CNBC Investing Club member to go behind the scenes with Jim Cramer and Jeff Marks as they talk candidly about the market’s biggest headlines. Signup here: cnbc.com/morningtake
Squawk on the Street
Cramer's Morning Take: Constellation Brands 4/11/24
Jim and Jeff say this surging beer stock still looks cheap on a cash-flow basis. Become a CNBC Investing Club member to go behind the scenes with Jim Cramer and Jeff Marks as they talk candidly about the market’s biggest headlines. Signup here: cnbc.com/morningtake
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- Duration:
- 5m
- Broadcast on:
- 11 Apr 2024
- Audio Format:
- mp3
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It wasn't. I mean, by and large, maybe extra than energy, a tick higher, but the headline was a little bit below expectation. So initially, you had yields move down, that's what we saw. The market at first stabilised at the open, but then the tenure, the yields started to move up, stocks fell. But your point about earnings is a good one because earnings can buck the Raytrend, and I think Constellation Brands is a good example of that today. Right. Now, I think that I would tell people if you saw selling Constellation Brands and was actually down, you have to buy it. The reason why you have to buy it is because having been in this business, the PPI is what are known as the kind of re-orders of beer, where the highest I can ever recall in the industry of alcohol. It's doing that well. Now, some of that is because of Bud Light, the problems there. You're sure they're taking the share. This is the kind of thing that is a cash flow machine, and now we know they have to pay down debt. We know that there are, that they spend a lot of money on CapEx, and this year's another CapEx. They need to build that capacity to support these shareholders. Right. And one of the things that I look as between returning capital and having an opportunity to grow earnings, I always want the company to spend the opportunity to grow earnings. And that's what these guys can do. But at the same time, they are doing a little bit of both. They do buy back stock. They raise the dividend 13% to $1.01, so that's raising the dividend in line with earnings growth. So we want them to do that. And then just real quick, run through the quarter, revenue up 7%, EPS $2.26, better than $2.08 expected. Beer was very strong. Wine and spirits, not good, but we figured it as much. No, but we accept that. And we were hoping actually that they trade that portfolio up to probably equity front. But guidance was a lot better than expected. And I think that's key, because this is for the next four quarters, right? So they're on a weird fiscal year schedule. So this is guidance for the next four quarters. But midpoint 13.65, nicely above estimates at 13.44, implying 13% earnings growth. So again, matching earnings with the dividend. And I think people were looking for something more conservative. Conference call starts at 10.30, expect them to talk more about the spring shelf reset, which could lead to some nice gains. Start your day with my outlook on the market every morning. Visit cbc.com/morningtake to become a CNBC Investing Club member at a special rate today. All opinions expressed by Jim Kramer on this podcast and in connection with the CNBC Investing Club are solely Kramer's opinions and do not reflect the opinions of CNBC, NBC, Universal, or their parent company or affiliates, and may have been previously disseminated by Kramer on television, radio, internet, or another medium. No specific outcome or profit is guaranteed in connection with your reliance upon or other use of the content from Kramer. The opinions offered in connection with this podcast and the CNBC Investing Club are not an attempt to induce any particular trading behavior, investment, or strategy. You should be aware of the risk of loss and following any strategy or investment discussed in the content from Kramer. To view the full CNBC Investing Club disclaimer, please visit cnbc.com/investingclubdisclaimer. The spirit of performance defines Accura and now it's electric, introducing the all-electric ZVX, Accura's most powerful SUV yet. While what powers their cars may change, the energy that makes Accura never will. After using the same formula that brought them electrified supercars and multiple MSA championships, the ZVX has tracked tested performance that packs an energy all its own. 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