Shares of beverage company Constellation Brands (NYSE:STZ) are trading higher Thursday after the company beat third-quarter analyst estimates for revenue and earnings per share. An analyst sees the strong results as a good start to 2026 for several reasons.

Constellation Brands shares are powering higher. What’s fueling STZ momentum?

The Constellation Brands Analyst: Needham analyst Gerald Pascarelli maintained a Buy rating on Constellation Brands with a price target of $180.

The Analyst Takeaways: Pascarelli said third-quarter results from Constellation Brands were "better than expected," highlighting revenue, operating income and earnings per share all coming in above estimates.

"This performance, along with a recent improvement in scanner volumes in December, ahead of cycling the Trump inauguration, CA wildfires, and a year of easy compares will likely result in some incremental optimism," Pascarelli said.

The analyst noted that beer and wine operating income both outperformed expectations. Beer depletions in the quarter were better than scanner results ahead of the report.

Pascarelli also highlighted that the company reiterated its full-year guidance.

"We view the quarter as a solid start to the calendar year ahead of a better setup looking out over the next 12 months."

The analyst said fading headwinds and easier comps could power shares higher going forward.

"STZ has remained a relative market share gainer amid a weak category backdrop, and brand health metrics remain best in class. Based on such a discounted valuation, we believe much of this ‘moment in time' bad news is already embedded in the shares."

STZ Price Action: Constellation Brands shares are up 3.8% to $146.02 on Thursday versus a 52-week trading range of $126.45 to $207.90. Constellation stock has fallen 33.4% over the last year.

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