Constellation Brands (STZ) is expected to witness a challenging start to the fiscal year 2026 upon the release of its fiscal Q1 earnings next month due to lower beer volumes, Needham said in a note on Wednesday.

Needham analysts said they expect beer revenue and operating margin to miss the low end of the full-year guidance and see a potential downside to current Wall Street estimates for the quarter as beer volumes worsened sequentially due to challenges with the Hispanic customers and poor weather.

As a result, Needham lowered its fiscal Q1 earnings per share estimate to $3.20 from $3.30, and cut its fiscal year 2026 and 2027 EPS estimates to $12.64 and $13.76 from $12.75 and $13.81, respectively.

Constellation Brands could maintain its current outlook and wait for trends to improve in July and August before re-evaluating the year, but this would likely raise questions on its ability to achieve targets due to an expected weak fiscal Q1, Needham said.

Needham maintained its buy rating on the stock but lowered its price target to $195 from $215.

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