Constellation Brands (STZ) Traded Lower Due to Slower Growth

Artisan Partners, an investment management company, released its “Artisan Mid Cap Value Fund” third-quarter 2025 investor letter. A copy of the letter can be downloaded here. In the quarter, the fund’s Investor Class fund ARTQX returned 0.97%, Advisor Class fund APDQX posted a return of 0.98%, and Institutional Class fund APHQX returned 0.97%, compared to a 6.18% return for the Russell Midcap Value Index. Equity markets continued their rally in the third quarter as investors overlooked tariff concerns, driven by strong corporate earnings, rising AI capital expenditures, and hopes for economic support from US fiscal policy and lower interest rates. In addition, please check the fund’s top five holdings to know its best picks in 2025.

In its third-quarter 2025 investor letter, Artisan Mid Cap Value Fund highlighted stocks such as Constellation Brands, Inc. (NYSE:STZ). Constellation Brands, Inc. (NYSE:STZ) is a company that produces and distributes beer, wine, and spirits. The one-month return of Constellation Brands, Inc. (NYSE:STZ) was -0.58%, and its shares lost 36.68% of their value over the last 52 weeks. On January 2, 2026, Constellation Brands, Inc. (NYSE:STZ) stock closed at $141.17 per share, with a market capitalization of $24.573 billion.

Artisan Mid Cap Value Fund stated the following regarding Constellation Brands, Inc. (NYSE:STZ) in its third quarter 2025 investor letter:

"Outside of health care, our weakest performer was Constellation Brands, Inc. (NYSE:STZ), a US producer and distributor of beer, wine and spirits, best known for its Mexican beer brands Modelo Especial and Corona. Constellation Brands is a recent new purchase that we added to the portfolio in July. The stock has been under pressure as growth has slowed markedly over the past year. While the trade war has yet to be a major factor as the company is USMCA(United States-Mexico Canada Agreement) compliant, there are significant demand headwinds for the company’s core Hispanic consumer. Elevated inflation had already been weighing on demand, but immigration raids more recently have depressed social activity in the Hispanic community. Investors are questioning whether the slowdown is cyclical or secular. The US beer market is no longer a growth market as organic population growth has stagnated, younger demographics are shifting away from alcohol and now immigration faces challenges. However, Constellation Brands has a loyal core customer and has been a steady share gainer in the US beer market over the past 20 years, driven by its Modelo Especial brand. We believe this should continue after these company-specific headwinds dissipate. While Hispanic population growth in the US contributed to these share gains, the company also experienced outsized growth among non Hispanic consumers. Additionally, Constellation Brands is following the same patient playbook to grow its smaller and rapidly growing Pacifico and Victoria brands, while adding product depth to its larger, more established brands’ shelf offerings. Given these growth concerns, Constellation Brands’ valuation is compelling at just 12X next year’s forecast earnings compared to its five-year average of 18X."

Constellation Brands, Inc. (NYSE:STZ) is not on our list of 30 Most Popular Stocks Among Hedge Funds. According to our database, 50 hedge fund portfolios held Constellation Brands, Inc. (NYSE:STZ) at the end of the third quarter, compared to 42 in the previous quarter. While we acknowledge the potential of Constellation Brands, Inc. (NYSE:STZ) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

In another article, we covered Constellation Brands, Inc. (NYSE:STZ) and shared the list of best sin stocks to buy in 2026. In addition, please check out our hedge fund investor letters Q3 2025 page for more investor letters from hedge funds and other leading investors.

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Disclosure: None. This article is originally published at Insider Monkey.