Strong sales make Constellation a bargain: Barron's

NEW YORK (Reuters) - The stock of winemaker Constellation Brands (STZ.N: Quote, Profile, Research) is a bargain, thanks to resilient wine sales in the United States and a recent emphasis on more upscale product, Barron's said in its July 7 edition.

Last week, Constellation reported a 50 percent increase in first-quarter net income as the company was able to increase its gross margin 5 points to 35 percent on operating efficiencies. Despite that, the stock has fallen by nearly 20 percent since October, the financial weekly reported.

Constellation is a potential bargain, Barron's said, noting that the stock trades at 12.2 times projected 2009 earnings, versus 18.8 for rival Brown-Forman Corp (BFb.N: Quote, Profile, Research) and 13.4 for Diageo (DGE.L: Quote, Profile, Research), and an average of 15.5 for distillers and vintners.

(Reporting by Phil Wahba, editing by Richard Chang)