Constellation Brands' (STZ) stock has lagged due to weak beer sales caused by economic pressures, cautious Hispanic consumers, and bad weather, however, these problems seem temporary, RBC Capital Markets said in a note Monday.

Analysts, including Nik Modi, said that the company is likely to keep feeling pressure in the near term due to ongoing economic and social challenges facing Hispanic consumers.

Data from Numerator Insights shows Hispanic spending on Constellation Brands' beer dropped in February through April but started to improve in May. However, the recovery may be uneven, especially with recent nationwide protests related to immigration enforcement. June also likely saw weaker sales, with some major markets declining further, RBC said.

The analysts added that although some challenges, like weather and the economy, are out of the company's control, it is well positioned for when the consumer gets back on better footing. Constellation Brands continues to gain market share and outperform other brands. Retailers and distributors don't see customers switching away from Constellation Brands, just buying less often, especially in the Hispanic community.

There are still many uncertainties for the rest of the fiscal year, including the overall consumer environment, Hispanic consumer confidence, potential tariffs, and rising geopolitical tensions in the Middle East, according to the note.

The beer market is still weak heading into the important summer season, the analysts said, adding that "at this point, we don't see much upside to numbers and could see Constellation Brands point more towards the lower end of guidance ranges due to temporary pressures. Overall, we continue to view Constellation Brands' risk-reward as favorable."

RBC has an outperform rating and a $233 price target on Constellation Brands.

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