A report on Constellation Brands (STZ, Financial) kept the company’s target P/E the same—at 17 times—despite the company’s recent purchase of a large interest in Canopy Growth Corporation (CGC). Canopy’s losses reduce Constellation’s reported EPS by about $0.85 so the analyst is inadvertently valuing Constellation’s Canopy investment at negative $-14 per Constellation share, despite its market value being positive $14.
From Bill Nygren (Trades, Portfolio)'s fourth-quarter 2019 market commentary.
