It's been up and down and down. It faces headwinds from the weight-loss drugs reduing consumption of alcohol, potential tariffs on Mexican goods (Modelo is a major brand of theirs), and Latinos, a key consumer, could be deported under Trump. But STZ spews cash and is growing, leading to Trump exempting STZ from tariffs. He just added more shares. He wants STZ to talk about this big brewery they're building in Mexico. He hopes they launch a huge share buyback. This is tricky.
He hopes we achieve this if the consumer stays strong and there's deregulation in capital markets and China bouncing back from the pandemic. More corporate tax rates could help, too. Then again, consumer spending could decline, tariffs and higher interest rates could curb the EPS.
Bullish sectors in 2025: aerospace, HVAC and anyone selling into data centres, financials (because of expected deregulation), pipelines, legacy tech (like Dell) as long it keeps generating growth, cybersecurity (hacks will continue), robotaxis. Bearish sectors in 2025: agriculture, defense (too expensive), anything sector needing a lot of finance because long rates remain high, packaged food (headwind of GLP-1 drugs), energy (Trump will encourage too much production and drive down prices), retail REITs, materials and commodities (need to see lower interest rates and Chinese demand must increase), quantum computing (a bubble in unprofitable companies).
They report Wednesday. The merger with Kroger's was blocked, which hurt ACI. He wants to hear what ACI says above decline in consumption, including salty snacks, cookies and candies alongside the rise of the GLP-1 drugs.