Constellation Brands' (STZ) fiscal 2027 earnings outlook appears achievable despite continued uncertainty around beer sales trends, with the company's resilient margins supporting its reaffirmed full-year guidance following Q1 results, UBS Securities said in a Thursday note.

UBS noted that Constellation reaffirmed its fiscal 2027 outlook, including earnings per share of $11.20 to $11.90, beer net sales growth of negative 1% to positive 1%, a beer operating margin of 37% to 38%, and operating cash flow of $2.4 billion to $2.5 billion.

The brokerage said investors remain cautious about the sustainability of recent demand improvements, even as management indicated beer sales trends improved in June.

UBS said the company's margin performance supports its fiscal 2027 earnings guidance despite ongoing top-line uncertainty, adding that recent share price weakness does not fully reflect the durability of its earnings outlook.

UBS maintained its buy rating and lowered its price target to $168 from $175.

Constellation Brands shares were down 5.2% in Monday trading.

Price: 130.72, Change: -6.75, Percent Change: -4.91