Constellation Brands' (STZ) topline face cyclical and structural headwinds despite a "compressed" stock valuation and an unexpected beat on fiscal Q2 margins, analysts at Morgan Stanley said in a Tuesday note.

Structural headwinds include health and wellness concerns, exacerbated by Glucagon-like peptide-1, or GLP-1 drugs to treat obesity, the analysts said.

The company also faces "demographic pressure with less demand from younger consumers, cannabis substitution effects, and sustained greater high-end beer competition," according to the note.

While seeing the "worst as likely over," the Morgan Stanley analysts noted that industry volume trends remain weak and the competitive environment is worsening.

Morgan Stanley lowered the price target on the stock to $160 from $176 and retained an equal-weight rating.

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