09:40 AM EST, 12/06/2024 (MT Newswires) -- Constellation Brands ( STZ ) is "better positioned" than its peers because of its improved capital allocation and corporate governance, and its shares "should be trading higher," Needham said in a Friday note.

The beer, wine and spirits producer's recent improvement in category growth and gains in market share should offer a "favorable" setup to deliver on its revised 2025 outlook although tariffs are likely a headwind for expansion, analysts Gerald Pascarelli and Jack Siedow said.

Within the beer category, the company continues "drive the best revenue growth and operating margins," the analysts said.

"We have been encouraged by the recent improvement in U.S. beer category growth over the past couple of months, along with STZ's takeaway trends, which have been accelerating on a one and two year basis," the analysts added.

Needham initiated coverage on STZ with a buy rating and $280 price target.

Price: 243.73, Change: +4.23, Percent Change: +1.77