Summary: Constellation Brands Inc.

Good brand strength across all product categories (beer, wine, and spirits); Above-industry-average growth rates; and Strong market shares despite regional concentration in the U.S. Pro forma leverage for the pending $4 billion increased stake to 40% in Canopy Growth Corp. is over 4.5x, which is more aggressive than its typical bolt-on acquisitions; Improving free operating cash flow as brewery growth capital expenditures wind down will allow for rapid deleveraging within 18-24 months; and The company remains committed to its 3.5x leverage and has committed to not pursuing acquisitions or making share repurchases until leverage improves to its target levels. The stable outlook reflects S&P Global Ratings' opinion that Constellation Brands Inc. will reduce debt-to-EBITDA near its target levels of 3.5x

...Business Risk: Strong Financial Risk: Significant + Good brand strength across all product categories (beer, wine, and spirits); + Above-industry-average growth rates; and + Strong market shares despite regional concentration in the U.S. + Pro forma leverage for the pending $4 billion increased stake to 40% in Canopy Growth Corp. is over 4.5x, which is more aggressive than its typical bolt-on acquisitions; + Improving free operating cash flow as brewery growth capital expenditures wind down will allow for rapid deleveraging within 18-24 months; and + The company remains committed to its 3.5x leverage and has committed to not pursuing acquisitions or making share repurchases until leverage improves to its target levels....

Summary