Raising a Glass to Beer Stocks 🍻

April 11, 2025

There's so much happening right now in the markets.

It often seems like there isn't enough time for a bathroom break...

That could be an exaggeration, but it's directionally accurate. ;)

This is why our director of research, Steve Strazza, has been going LIVE every day after the market opens.

He's pulling back the curtain and showing how a successful trader navigates in this market environment.

These videos are so insightful...

You can catch the replay of yesterday's video where he went through his current shopping list (there's so much alpha here).

Keep an eye on the Stock Market TV website to avoid missing the next event.

Now, let's talk about what's happening with this earnings season.

*Click the image to enlarge it

Constellation Brands $STZ reported a double beat with a reaction score of 7.65. The market loved it...

The company reported revenues of $2.16B, versus the $2.13B estimate, and earnings per share of $2.63, versus the $2.27 estimate.

Carmax $KMX reported a double miss with a reaction score of -3.65. It was gross!

The company reported revenues of $6B, which is what Wall Street was expecting, and earnings per share of $0.58, versus the $0.66 estimate.

Now let's dive into the data and talk about what happened with these reports 👇

Constellation Brands rallied 0.74% after this earnings report, and here's why:

Beer sales are back to growing after being stagnant for years
They're getting out of the wine business (which has sucked for years) and leaning into their strengths (beer)
Issued better-than-expected forward guidance
And they authorized a new $4B share repurchase program

This was their best report in years...

The stock resolved a prolonged distribution pattern earlier this year and got crushed.

However, the price has stopped falling and looks poised to retest the breakdown level soon.

If STZ is above 190, the path of least resistance is higher toward 228.

Carmax fell 17% after this earnings report, and here's why:

Their market share and sales are flatlining
Gross profit per vehicle decreased by $75
And they removed all forward-looking guidance (introducing tremendous uncertainty)

As you can see on the chart, the stock has gone nowhere for years because the fundamentals are deteriorating.

We expect this to persist for the foreseeable future.

If KMX is below 88, we expect it to continue churning sideways in a range.

Thank you for reading.

- The Beat Report Team