Constellation Brands STZ reverse DCF

What growth is priced into STZ? The market price taken as given, and the free-cash-flow growth it implies solved for — five years at one rate, a fade to 2.5%, a perpetuity — at the return you require, from the filed statements on the Constellation Brands stock page. A growth rate to argue with, not a value. New to the method? Start with how to read a reverse DCF; the arithmetic is on the tool page.

How to read this page

Close · Oct 16, 2026131.35Market cap $22.2B · Beverages - Alcoholic

Free cash flow · FY2026$1.8BOCF $2.7B − capex $875.0M

Enterprise value$32.7Bnet debt $10.5B = debt $10.6B − cash $102.4M

EV / FCF18.2×years of today's cash flow in the price

Priced in · at 10.0%7.7% a yearFCF growth, years 1–5, then a fade to 2.5%

Base yearFY2026statements through Feb 28, 2026

At 131.35 the price implies free cash flow growing

7.7%a year for 5 years

then fading to 2.5% by year 10, discounted at 10.0%. That path takes FCF from $1.8B to $2.6B in FY2031 and $3.3B in FY2036 (1.8× today’s).

Required return

Terminal growth

Where that sits

Ruler is 0–100% a year. Marks are history — what happened, not what will — and a company’s own past is on it only when it is positive.

The cash flow the price needs

reported (grey) and required (blue), $B

Years 1–5 at the implied rate; years 6–10 fade in a straight line to 2.5%; a perpetuity at 2.5% after year 10. Every year is drawn, so nothing hides in the terminal value.

Sensitivity

the required return is the other half of the answer

Required return	Implied growth y1–5	FCF FY2031	FCF FY2036	× today
6.4%	−3.5%	$1.5B	$1.5B	0.8×
8.0%	2.1%	$2.0B	$2.2B	1.2×
9.0%	5.1%	$2.3B	$2.7B	1.5×
10.0%	7.7%	$2.6B	$3.3B	1.8×
11.0%	10.2%	$2.9B	$3.8B	2.1×
12.0%	12.5%	$3.2B	$4.4B	2.5×

Demand more return and the price needs faster growth to be justified. The reference engine uses 6.4% for STZ (its beta); most hand-built DCFs on large companies use 8–10%.

Flip it: return at a growth you believe

hold the path, solve for the return

FCF growth y1–5, then the fade	Annual return at 131.35
5%	9.0%
10%	10.9%
15%	13.1%
20%	15.6%
25%	18.3%
30%	21.2%
35%	24.2%

Same arithmetic, other unknown: if the cash flow follows that path and you paid today’s price, this is the return the path pays. Colour: below 6% orange, 6–9% amber, above 9% green — thresholds, not a call.

Anchors

what the same number looked like in the past

Revenue CAGR, 5 yr: +1%
FCF CAGR, 5 yr: −2%
Revenue CAGR, 3 yr: −1%
FCF CAGR, 3 yr: +1%
Revenue growth, last year: −10%
FCF growth, last year: −7%
Consensus revenue growth, next year: −0%
S&P 500 earnings, long run: ~6–7% a year

History from the filed annual statements on the financials page; the long-run index figure is the usual textbook range. None of it is a forecast.

How to read this

an assumption to argue with, not a verdict

A forward DCF guesses cash flows and prints a value. This runs it backwards: it takes the market price as given and solves for the one unknown — how fast free cash flow has to grow for the price to be exactly fair at the return you require. The output is a growth rate you can compare with the company’s past, with the index, and with what you know about the business.

It does not say whether 131.35 is the right price. It says what you have to believe to pay it. Full method → · How to read a reverse DCF →

Base year Feb 28, 2026 · price Oct 16, 2026 · shares 169.2M · net debt = total debt $10.6B − cash and short-term investments $102.4M