Constellation Brands' (STZ) fiscal Q1 print was "better than feared" in the context of the past earnings cycle, Needham said Thursday.

The company was "clear" in its expectations for the beer business to grow in fiscal Q2 despite "challenged" performance and a slow June start, Needham analysts Gerald Pascarelli and Jack Siedow said in a note to clients.

The weather forecast for the July 4 weekend looks "promising" for Constellation's key markets as the first scanner read this month will be "key to driving incremental conviction on the recovery story," the analysts said.

"While [Constellation] still remains a 'show me' story, with valuation well off historical averages, we like the risk/reward setup from here as comps will ease, and the weather should seemingly improve relative to May and June," the analysts wrote.

Needham raised its price target on the company's stock to $200 from $195, while reiterating its buy rating.