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Strategies & Market Trends : Value Investing
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To: benbuffett who wrote (78165)11/24/2025 9:16:28 AM
From: Sean Collett1 Recommendation

Recommended By
Spekulatius

  Read Replies (2) of 78751
 
RE: $STZ

$STZ may not be a bad one to look into further. Has normally held a 15x EV/EBITDA (when cycle was good) and trading below that at ~9.82x and EBITDA has compounded at a rate of 7.58% since 2020. If we assume booze companies finally catch a bid and EBITDA grows ~6% over next five years that puts it around $4,815.34M. Discount the value back 10-12% and I have a share price around $195.46-213.89 which is a gain range of 46.24%-60.03% from where we are today at $133.66. The 15x would be a market premium here though and requires the booze trend to reverse course.

FCF this year alone has been $1,047M with core cash flow being $1,200M. CAPEX spending has trended down as it was 8% of revenue in 2020 and is now 3.7%.

Debt isn't too attractive though with a DEBT/EBITDA of 2.93x and I have net debt around $10,472.90M.

I will watch this a bit as I think there may be opportunity to enter at a better price. Especially since this one requires an industry shift.

Will take a look at a few others though too and start building my "buy" list. So far $STZ and $SAM are only ones who hit my screen and the above on $STZ is my 20 min dive so more work needed to value the opportunity.

Thanks for bringing this one!

-Sean
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