4 Liquor Stocks Trading Below Value to Watch Out in 2025
As the global economy continues its recovery, the alcohol and beverage industry is showing strong signs of resilience and expansion. However, not all liquor stocks are trading at fair value. Several well-established alcohol companies are currently undervalued—creating a golden opportunity for savvy investors.
Here are 4 undervalued liquor stocks you should keep on your radar in 2025.
1. Constellation Brands Inc. (NYSE: STZ)
Why It’s Undervalued:
Despite owning premium labels like Corona, Modelo, and Svedka, Constellation Brands has seen its valuation lag behind its peers due to short-term concerns over inflation and slowing beer sales.
2025 Outlook:
The company's push into premium wine and craft spirits, coupled with its strategic investment in cannabis via Canopy Growth, offers long-term diversification and growth potential.
Key Metrics:
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P/E Ratio: Below sector average
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Dividend Yield: ~1.4%
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Market Cap: $40+ Billion
2. Diageo plc (NYSE: DEO)
Why It’s Undervalued:
A global titan with brands like Johnnie Walker, Guinness, and Tanqueray, Diageo has underperformed the market due to recessionary fears and forex pressures.
2025 Outlook:
With aggressive expansion in emerging markets and high-margin premium spirits, DEO is poised for a comeback in 2025. Cost-cutting initiatives are also expected to boost earnings.
Key Metrics:
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Forward P/E: 16 (vs. industry avg. of 22)
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Strong global distribution footprint
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Solid dividend history
3. Pernod Ricard SA (EPA: RI)
Why It’s Undervalued:
French beverage giant Pernod Ricard has experienced a temporary slowdown in Asia, especially China, leading to a dip in share price.
2025 Outlook:
Pernod Ricard’s top-shelf portfolio (Jameson, Absolut, Chivas Regal) and rising demand in the U.S. and Europe make it a strong long-term value play.
Key Metrics:
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Low Price-to-Book Ratio
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Revenue expected to grow 5–7% CAGR
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Efficient capital allocation strategy
4. Brown-Forman Corporation (NYSE: BF.B)
Why It’s Undervalued:
Best known for Jack Daniel’s, Brown-Forman has faced headwinds from supply chain disruptions and higher input costs, dragging down investor sentiment.
2025 Outlook:
The company is investing in automation, expanding its RTD (ready-to-drink) offerings, and penetrating new markets in Asia. These moves could reignite growth.
Key Metrics:
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PEG Ratio under 1.5
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Consistent dividend growth (38+ years)
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Increasing global whiskey demand
📈 Why Invest in Undervalued Liquor Stocks?
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Stable Consumer Demand: Alcohol is a recession-resistant product.
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Brand Loyalty: Many of these companies hold iconic, globally recognized brands.
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Strong Cash Flow: Liquor businesses tend to be highly profitable with solid margins.
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Dividends: Many of these stocks offer steady dividend income.
🔍 FAQs: Undervalued Liquor Stocks 2025
Q1. Why are some liquor stocks currently undervalued?
Some are experiencing temporary issues like regional sales dips, inflation, or forex pressure, but their long-term fundamentals remain strong.
Q2. Are liquor stocks a good hedge during inflation?
Yes, alcohol companies often pass cost increases onto consumers, making them relatively inflation-resistant.
Q3. What’s the best way to invest in these stocks?
You can invest through a brokerage account or consider ETFs that have alcohol sector exposure if you prefer diversification.
Q4. Is now a good time to buy liquor stocks?
2025 presents a strong opportunity as many top-tier companies are trading below intrinsic value with promising growth catalysts.
✅ Final Thoughts
The liquor industry has proven its ability to weather economic storms, and several key players are now trading below their fair value. These 4 liquor stocks—Constellation Brands, Diageo, Pernod Ricard, and Brown-Forman—offer both value and growth potential for investors looking toward 2025.
Published on : May 12, 2025
Posted by : PAVAN