Citi Waiting Patiently for Constellation Brands' Strategy

In a research report released by Citi this morning, Constellation Brands

is doing well with its turnaround efforts. According to Citi, "Today, we hosted STZ's CFO, Bob Ryder, at our conference in NYC. While the long-term turnaround is taking time (and is taking longer than many expected) we actually liked what we heard. Over the last few years, STZ has made nice progress in terms of 1) streamlining their business after multiple years of acquisitions, 2) consolidating their distribution, 3) optimizing their grape purchasing, and 4) paying down debt. All of this is has resulted in a much healthier balance sheet and improved FCFs, which are funding STZ's massive share buyback program. But, the stock doesn't reflect any of this today as investors are still waiting for 1) clarity around Crown Imports, and 2) a turnaround in their wine business." Citi maintains its Neutral rating and $24 PT on Constellation Brands, which closed yesterday at $19.15.