TGM's two-stage DCF values Constellation Brands, Inc. (STZ) between $100.23 and $233.05 depending on assumptions, with a base case of $145.18. Growth is taken from the company's own record (blend of 5-year revenue and FCF growth (floored at 2%)), fading to 2.5% long-run; the discount rate (7.5%) reflects its beta.
What would today's price require?
$120.98 is justified only if free cash flow grows about -0.9% a year (fading to 2.5% long-run) at a 7.5% required return — about in line with its track record.
| Scenario | FCF growth (fading to 2.5%) | Discount | Value / share |
|---|---|---|---|
| Conservative | 0.5%/yr | 8.5% | $100.23 |
| Base case | 2.0%/yr | 7.5% | $145.18 |
| Optimistic | 5.0%/yr | 6.5% | $233.05 |
Current Price
$120.98
Market-Implied Growth
-0.9%/yr
vs -1.7% 5Y actual
Model Scenario Range
$100.23 – $233.05
model output — not a price target
Edit the assumptions to see how they change the estimated fair value. Opens seeded with TGM's data-driven base case for STZ (growth from its own 5-year record, discount from its beta), so the sandbox starts where the scenarios above leave off. Illustrative model — not investment advice.
Base inputs: FCF $1.8B · 0.17B shares · net debt $10.5B
Estimated Fair Value
$145.18
+20.0% vs $120.98
How the estimated fair value shifts with the discount rate (WACC) and terminal growth, holding your 2.0%/yr FCF growth and 10-year horizon fixed. Green = above today's $120.98; red = below. Your current case is outlined.
| WACC ↓ / Terminal → | 1.50% | 2.00% | 2.50% | 3.00% | 3.50% |
|---|---|---|---|---|---|
| 5.5% | $206 | $239 | $282 | $344 | $436 |
| 6.5% | $152 | $172 | $197 | $228 | $271 |
| 7.5% | $117 | $130 | $145 | $164 | $188 |
| 8.5% | $91.08 | $100 | $111 | $123 | $138 |
| 9.5% | $71.98 | $78.68 | $86.33 | $95.14 | $105 |
