Despite the New York-based company's better-than-expected third quarter earnings released on Thursday, the company's stock is down due to panic from investors that the incoming Trump administration could produce tariffs or taxes on imported beer, according to Stifel.
In a note released prior to the company's earnings, Stifel said Trump policies could off set any benefit Constellation would gain from a tax reduction.
Trump has focused his agenda in part on producing U.S.-made goods as well as slashing U.S. taxes across the board. The company has breweries in Nava, Mexicali and Obregon in Mexico.
"In a worst case scenario of substantially increased taxation on brewing in Mexico (likely supported by US domiciled craft brewers), Constellation would likely undertake a partial or fully offsetting US retail price increase on a portfolio characterized by brand strength in the comparatively inelastic beer category," Mark Swartzberg, securities analyst at Stifel, said in the report released on Tuesday.
Constellation, which has brands such as Corona and Modelo, could benefit from Trump's proposed tax measures, however. Swartzberg added Trump favors company's like Constellation that have a lack of history moving production to Mexico. Trump's policy tax and trade policy change could aid Constellation, he said.
Earlier on Thursday, the company posted earnings of $1.96 a share, beating Thomson Reuters estimates of $1.72 a share. The company's net sales for beer also increased 16 percent in the quarter.
The company adjusted its fiscal 2017 outlook. It predicts a profit of $7.55 to $7.65 a share, compared to a previous forecast of $6.30 to $6.45.
The company's stock is down more than 3 percent year to date.
—Reuters contributed to this report.