Brown Forman A (BF.A) AI Stock Analysis

• Market Cap: $13.70B
• Dividend Yield: 3.41%
• Average Volume (3M): 177.61K
• Price to Earnings (P/E): 17.4
• Beta (1Y): 0.49
• Revenue Growth: -4.59%
• EPS Growth: -19.19%
• Country: US
• Employees: 5,700
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Beverages - Wineries & Distilleries
• EPS (TTM): 0.47
• Shares Outstanding: 168,614,780
• 10 Day Avg. Volume: 138,674
• 30 Day Avg. Volume: 177,610
• PEG Ratio: -1.31
• Price to Book (P/B): 4.12
• Price to Sales (P/S): 4.14
• P/FCF Ratio: 38.21
• Enterprise Value/Market Cap: 1.21
• Enterprise Value/Revenue: 4.26
• Enterprise Value/Gross Profit: 7.20
• Enterprise Value/Ebitda: 13.72
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 64 Neutral
• Price Target: $32.00 ▲(23.74% Upside)
• Action: Downgraded Date: 01/13/26
• Date: Action: Downgraded 01/13/26

The score is driven primarily by solid underlying financial performance (strong margins and cash conversion) and supportive valuation (moderate P/E and strong dividend yield). These positives are meaningfully offset by weak technicals, with the stock in a clear downtrend and negative momentum indicators.

Positive Factors

High margins & operational efficiency

Brown‑Forman’s ~59% gross margin and ~21% EBIT (~30.5% EBITDA) indicate durable profitability and operating leverage in premium spirits. High structural margins support reinvestment, marketing and consistent cash returns even if volumes fluctuate, preserving long‑term competitiveness.

Robust cash generation

A strong FCF-to-net-income ratio (~80%) and positive FCF growth (~4.45% TTM) show excellent cash conversion from operations. This durable cash generation supports dividends, targeted brand investments and balance‑sheet flexibility without reliance on external financing.

Leading brand portfolio & global reach

Iconic brands (e.g., Jack Daniel’s) and distribution in 170+ countries create durable pricing power and channel access. Longstanding distributor partnerships and brand loyalty support consistent premium placement, allowing steady revenue per unit and resilience versus private‑label competition.

Negative Factors

Revenue contraction

TTM revenue decline (-1.49%) signals weakening top‑line momentum that can erode scale benefits over time. If sustained, lower volumes limit operating leverage, constrain marketing ROI and make margin maintenance harder despite premium positioning in some markets.

Declining stockholders' equity

A noted decline in stockholders’ equity reduces the capital cushion and could reflect buybacks, dividend strain, or accumulated losses. Over months this can limit strategic flexibility, increase leverage sensitivity and reduce ability to absorb shocks or fund acquisitions.

Earnings deterioration

Material EPS contraction (~-19% recent) suggests pressure on profitability drivers or mix shifts. Sustained earnings weakness hampers reinvestment, constrains dividend growth potential and raises execution risk for maintaining marketing and innovation spending needed to restore top‑line growth.

Brown Forman A Business Overview & Revenue Model

Company Description

Brown-Forman Corporation, together with its subsidiaries, manufactures, distills, bottles, imports, exports, markets, and sells various alcoholic beverages. It provides spirits, wines, whiskey spirits, whiskey-based flavored liqueurs, ready-to-drink and ready-to-pour products, ready-to-drink cocktails, vodkas, tequilas, champagnes, brandy, bourbons, and liqueurs. The company offers its products primarily under the Jack Daniel's, Reserve, Old Forester, Coopers' Craft, Herradura, el Jimador, New Mix, Korbel Champagnes, Sonoma-Cutrer, Finlandia, GlenDronach, Benriach, Glenglassaugh, Chambord, Slane, and Fords Gin brands. It is also involved in the sale of used barrels, bulk whiskey, and wine; and provision of contract bottling services. The company serves retail customers and consumers through distributors or state governments; and retailers, wholesalers, and provincial governments directly. It has operations in the United States, Germany, Australia, the United Kingdom, Mexico, and internationally. The company was founded in 1870 and is headquartered in Louisville, Kentucky.

How the Company Makes Money

Brown-Forman generates revenue primarily through the sale of its extensive range of alcoholic beverages. The company's revenue model relies on direct sales to wholesalers and retailers, as well as through e-commerce channels. Key revenue streams include the sale of its flagship brands, particularly whiskey, which accounts for a substantial portion of its earnings. The company benefits from strong brand loyalty and recognition, allowing it to maintain premium pricing. Additionally, Brown-Forman has established significant partnerships with distributors around the world, enhancing its market reach and operational efficiency. The company also invests in marketing and promotional activities to support its brands, which contributes to sustained growth in sales. Overall, Brown-Forman's financial success is driven by its commitment to quality, strategic brand management, and a global distribution network.

Brown Forman A Financial Statement Overview

Summary

Financials are solid overall: strong gross margin (~59%) and healthy EBIT/EBITDA margins (~21%/~30.5%) support profitability, and cash flow quality is strong (FCF to net income ~80% with positive FCF growth ~4.45%). Offsetting factors include slightly weaker net margin (down to ~20.8%) and negative revenue growth (-1.49% TTM), plus declining stockholders’ equity as a balance-sheet watch item.

Income Statement

Brown Forman A's income statement shows a strong gross profit margin of approximately 59% for TTM, indicating efficient cost management. However, the net profit margin has decreased to 20.8% from 21.9% in the previous annual report, reflecting a slight decline in profitability. The revenue growth rate is negative at -1.49% TTM, suggesting a contraction in sales. Despite this, the company maintains a healthy EBIT margin of 21% and an EBITDA margin of 30.5% TTM, showcasing operational efficiency.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio of 0.56 TTM, indicating a balanced approach to leveraging. Return on equity is solid at 21.2% TTM, reflecting effective use of equity to generate profits. The equity ratio stands at 50.3% TTM, suggesting a stable financial structure with a good proportion of assets financed by equity. However, the decrease in stockholders' equity over the periods indicates potential challenges in maintaining equity growth.

Cash Flow

Cash flow analysis shows a positive free cash flow growth rate of 4.45% TTM, indicating improved cash generation. The operating cash flow to net income ratio is 0.54 TTM, suggesting that operating cash flow adequately supports net income. The free cash flow to net income ratio is robust at 80.2% TTM, highlighting strong cash conversion capabilities. These metrics reflect a healthy cash flow position, supporting ongoing operations and potential investments.

Breakdown	TTM	Apr 2025	Apr 2024	Apr 2023	Apr 2022	Apr 2021
Income Statement
Total Revenue	3.89B	3.98B	4.18B	4.23B	3.93B	3.46B
Gross Profit	2.30B	2.34B	2.53B	2.49B	2.39B	2.09B
EBITDA	1.21B	1.29B	1.51B	1.19B	1.27B	1.24B
Net Income	810.00M	869.00M	1.02B	783.00M	838.00M	903.00M
Balance Sheet
Total Assets	8.22B	8.09B	8.17B	7.78B	6.37B	6.52B
Cash, Cash Equivalents and Short-Term Investments	319.00M	444.00M	446.00M	374.00M	868.00M	1.15B
Total Debt	2.65B	2.73B	3.10B	2.91B	2.27B	2.56B
Total Liabilities	4.09B	4.09B	4.65B	4.51B	3.64B	3.87B
Stockholders Equity	4.13B	3.99B	3.52B	3.27B	2.74B	2.66B
Cash Flow
Free Cash Flow	610.00M	431.00M	419.00M	457.00M	798.00M	755.00M
Operating Cash Flow	761.00M	598.00M	647.00M	640.00M	936.00M	817.00M
Investing Cash Flow	247.00M	249.00M	49.00M	-1.35B	-127.00M	98.00M
Financing Cash Flow	-1.11B	-843.00M	-618.00M	239.00M	-1.04B	-485.00M

Brown Forman A Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 25.86
• 50DMA: Positive
• 100DMA: Positive
• 200DMA: Positive
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BF.A, the sentiment is Positive. The current price of 25.86 is below the 20-day moving average (MA) of 29.20, below the 50-day MA of 28.18, and below the 200-day MA of 28.62, indicating a bullish trend. The MACD of 0.74 indicates Negative momentum. The RSI at 64.16 is Neutral, neither overbought nor oversold. The STOCH value of 66.37 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for BF.A.

Brown Forman A Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
SAM	68 Neutral	$2.49B	27.28	9.58%	―	-1.13%	24.34%
STZ	67 Neutral	$27.10B	24.64	14.29%	2.92%	-5.57%	119.49%
BF.A	64 Neutral	$13.70B	17.41	20.67%	3.41%	-4.59%	-19.19%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
CPB	60 Neutral	$8.21B	14.24	14.82%	5.64%	2.71%	4.90%
DEO	60 Neutral	$52.63B	22.36	22.33%	4.80%	0.22%	-38.76%
TAP	54 Neutral	$10.07B	-4.46	-18.35%	4.08%	-4.01%	-339.22%