It's a matchup between two of the world's largest brewing companies with diverging fortunes in 2025. Shares of Constellation Brands(NYSE: STZ) are down 15% year to date as of this writing amid uncertainties regarding its import-heavy beer portfolio and the effect of tariffs on its U.S. market positioning.
In contrast, Anheuser-Busch InBev(NYSE: BUD) (also known as AB InBev) has emerged as an outperformer, with strong earnings momentum propelling the stock higher by 32% thus far this year to its highest level since 2021. Should investors ride the buzz with Anheuser-Busch for more upside, or does Constellation Brands present the opportunity to pick up a beaten-down industry leader at a discount?
Let's discuss which beer stock is the better pick for your portfolio today.
Image source: Getty Images.
The case for Constellation Brands
Constellation Brands is recognized for its premium positioning in the beer market, holding exclusive rights to sell the flagship Corona, Modelo Especial, and Pacifico brands in the United States. The company's success in marketing these high-end imports is shown by a record 15 years of beer volume sales gains. Modelo is currently the top-selling beer brand in the United States, having overtaken Anheuser-Busch's Bud Light since 2023.
However, changes in trade policy implemented by the Trump administration pose challenges for Constellation this year, as all its beer is produced in Mexico. The company is responding to 25% tariffs through several measures, including modest price hikes and cost-saving initiatives, while using U.S.-sourced inputs like barley to secure some U.S.-Mexico-Canada Agreement (USMCA) tariff exemptions. Nevertheless, the result is some near-term financial weakness.
Constellation Brands is cutting its medium-term outlook for sales and earnings through the next three years. For the year ahead, the company is now targeting adjusted earnings per share (EPS) of between $12.60 and $12.90, marking a 7.5% decline at the midpoint compared to fiscal 2025 (which ended Feb. 28). For fiscal 2027 and 2028, Constellation is projecting organic revenue growth between 2% and 4%, down from a prior forecast of 6% to 8%.
While these headline numbers are a setback, the bigger takeaway is that Constellation Brands continues to generate profitable growth and benefits from a loyal customer following.
The bullish case for the stock now is that the recent sell-off has already priced in some of the worst-case scenarios, positioning the company to exceed its lowered expectations. Compared to Anheuser-Busch, Constellation Brands stock may offer better value at the current level, trading at a forward price-to-earnings (P/E) ratio of 14.8 compared to its competitor's 17.4 earnings multiple.
Investors who believe Constellation Brands' current weakness is temporary can make the case that it's the best beer stock to buy now, ahead of a potential rebound.
Anheuser-Busch is the world's largest brewer by volume and stands out with a portfolio of over 500 beer brands sold in more than 100 countries. Its scale and diversification outshine Constellation's U.S.-focused model, with U.S. beers like Budweiser, Bud Light, and Michelob Ultra brewed locally, shielding them from tariff disruptions.
This profile has paid off this year, with Anheuser-Busch delivering impressive operating and financial performance to start the year. In the first quarter, underlying EPS rose by 7.1% year over year on a 1.5% increase in net revenue globally, with both metrics beating Wall Street estimates.
An important theme for the brewer has been momentum in emerging markets like South America and Europe, Middle East, and Africa (EMEA) countries. Innovative products like alcohol-free beer and its "beyond beer" portfolio with a lineup of hard seltzers and cocktail drinks are gaining traction, adding to profitability margins. For the full year, the company expects further earnings upside, with this stronger outlook helping to justify its valuation premium relative to Constellation Brands.
Ultimately, investors who value Anheuser-Busch's global leadership and its growth trajectory have plenty of reasons to buy and hold the stock for the long run.
Which beer stock to buy now?
In a delicate macroeconomic environment, I believe Anheuser-Busch InBev is the better beer stock, offering stronger fundamentals and broad geographic diversification. Constellation Brands faces too many uncertainties to buy with conviction. Anheuser-Busch InBev will likely outperform, making it a solid addition to diversified portfolios.
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