With hardly anything happening on the earnings front this week (and we already recommended one of the week’s major reports — Monsanto [NYSE: MON] — last week), we’re scraping the bottom of the barrel today … the wine barrel that is. We’re going to take a look at Constellation Brands (NYSE: STZ), which specializes in various wine (Robert Mondavi, Woodbridge, Clos du Bois) and beer (Corona, Negra Modelo) brands.

STZ reports Thursday before the open, with analysts looking for a penny less than a year ago (the whisper number is two cents higher). The company has an enviable record of beating or meeting these estimates with just one miss in the past four years.  Performance after recent reports has generally been robust with the stock gaining solid ground a week after three of the past four reports.

The stock has been on a strong run for the past two weeks, gaining around 14% and pulling ahead of its key daily moving averages. Next up is the February high around 2% higher than the current share price. Options trading investors should note that with no technical impediments and scant overhead call open interest, the path of least resistance should be to the upside.

Constellation Brands (NYSE: STZ)

STZ has been on a campaign to buy up premium brands for the past decade, a strategy that should start to pay off as the economy recovers. Wine consumption in the U.S. continues to soar to the extent that it now ranks #1 in consumption (total, not per capita). And exports are also going strong, a sign that domestic brands are pushing past perceptions that U.S. wines are inferior.

With expectations low (just two “buys” among nine covering analysts), a solid history of beating earnings estimates, and a strengthening domestic market for premium wines, STZ should do well after earnings. Buy the STZ May 20 Call for $1.30 or less.

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