Brown Forman A (BF.A)
NYSE:BF.A
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Brown Forman A
(NYSE:BF.A)
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Rating:69Neutral
Price Target:
$29.00
▲(12.14% Upside)
Action:Downgraded
Date:06/05/26
Overall score reflects solid underlying financial quality (strong margins and improving leverage) and supportive valuation (reasonable P/E and strong dividend yield). These positives are tempered by weaker technical trend signals (below key moving averages with negative MACD) and recent softness/volatility in growth and cash flows.
Positive Factors
Strong margins
Consistently high gross and operating margins provide a durable earnings buffer versus peers. Strong margin structure supports cash generation, funds brand investment and dividends, and makes the business more resilient to input cost pressure over a multi-quarter horizon.
Negative Factors
Revenue weakness
Stalled top-line growth erodes operating leverage and limits upside from fixed-cost absorption. If the firm cannot reaccelerate volume or premiumization, sustained flat/declining revenues will pressure long-term earnings growth and constrain returns to shareholders.
Read all positive and negative factors
Positive Factors
Negative Factors
Strong margins
Consistently high gross and operating margins provide a durable earnings buffer versus peers. Strong margin structure supports cash generation, funds brand investment and dividends, and makes the business more resilient to input cost pressure over a multi-quarter horizon.
Read all positive factors
Brown Forman A (BF.A) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$12.22B
Dividend Yield3.41%
Average Volume (3M)177.61K
Price to Earnings (P/E)17.0
Beta (1Y)0.56
Revenue Growth-0.53%
EPS Growth-16.82%
CountryUS
Employees5,700
SectorConsumer Defensive
Sector Strength42
IndustryBeverages - Wineries & Distilleries
Share Statistics
EPS (TTM)1.52
Shares Outstanding168,441,240
10 Day Avg. Volume138,674
30 Day Avg. Volume177,610
Financial Highlights & Ratios
PEG Ratio-1.00
Price to Book (P/B)2.99
Price to Sales (P/S)3.06
P/FCF Ratio13.46
Enterprise Value/Market Cap1.18
Enterprise Value/Revenue3.68
Enterprise Value/Gross Profit6.07
Enterprise Value/Ebitda12.29
Forecast
1Y Price Target
$26.00Price Target Upside0.54% Upside
Rating ConsensusModerate Sell
Number of Analyst Covering2
EPS Forecast (FY)1.7
Revenue Forecast (FY)$3.95B
Brown Forman A Business Overview & Revenue Model
Company Description
Brown-Forman Corporation, along with its subsidiaries, is a global enterprise specializing in the production and distribution of a diverse range of alcoholic beverages. Its comprehensive operations cover manufacturing, distilling, bottling, and th...
How the Company Makes Money
Brown-Forman makes money primarily by selling branded alcoholic beverages to distributors, retailers, and on-premise customers (e.g., bars and restaurants) in markets worldwide. Its core revenue stream is net sales of spirits and other alcoholic b...
Brown Forman A Earnings Call Summary
Earnings Call Date:Dec 04, 2025
(Q2-2026)
| % Change Since: |
Next Earnings Date:Sep 02, 2026
Earnings Call Sentiment Neutral
The call presented a mix of clear strategic and operational positives — strong emerging-market and Travel Retail growth, successful innovation (Jack Daniel's Blackberry and New Mix RTD), improved cash flow and margin benefits from A&D activities, and completed route-to-consumer transitions — alongside sizable, company-specific negatives (used barrel sales collapse and the Canada trade ban) and soft developed-market demand that materially weighed on reported results and EPS. Management reaffirmed guidance, emphasized cost discipline and capital return actions, and signaled confidence in execution, but acknowledged persistent near-term headwinds and product-mix challenges.Positive Updates
Top-line Performance (Reported vs Organic)
Reported net sales declined 4% in the first half of fiscal 2026, while organic net sales were flat (0%) after adjusting for acquisition & divestiture (A&D) impacts related to Korbel and Sonoma-Cutrer.
Negative Updates
Severe Decline in Used Barrel Sales
Used barrel sales plunged by more than 60% (management cited ~61% decline in H1), a material headwind that materially reduced first-half organic net sales and was highlighted as a significant fiscal-2026-year issue for the business.
Read all updates
Q2-2026 Updates
Positive
Negative
Top-line Performance (Reported vs Organic)
Reported net sales declined 4% in the first half of fiscal 2026, while organic net sales were flat (0%) after adjusting for acquisition & divestiture (A&D) impacts related to Korbel and Sonoma-Cutrer.
Read all positive updates
Company Guidance
Brown‑Forman reaffirmed its full‑year fiscal 2026 outlook, guiding to a low single‑digit decline in organic net sales with shipments expected to be roughly in line with depletions, and forecasting reported gross‑margin expansion as A&D benefits (about +190 bps) more than offset negative price/mix (≈‑50 bps) and higher costs (≈‑110 bps). In the first half, reported net sales fell 4% while organic net sales were flat after A&D adjustments; reported gross profit decreased 4% with a 59.5% reported gross margin, reported operating income was down 9% (organic operating income down 4%), and diluted EPS declined 13% to $0.83. Management expects used barrel sales to be lower by more than half of FY2025 levels (H1 used barrel organic net sales were down >60%) and assumes Canada headwinds will persist (Canada organic net sales also down >60%); geographic expectations include emerging markets +12% YTD, Global Travel Retail +6%, developed international −6% and the U.S. roughly flat in H1. Financial/capital metrics and returns include an updated full‑year capex range of $110–$120M (previously $125–$135M), cash from operations of $292M (up $163M), free cash flow of $236M (up $179M), an effective tax‑rate outlook of ~21–23%, a 2% quarterly dividend increase (42nd consecutive annual increase) and a Board‑authorized $400M buyback (≈$99M repurchased as of Oct. 31). Finally, management reiterated no assumed change to current tariff impacts and expects organic operating income to decline in the low single‑digit range for FY2026.Brown Forman A Financial Statement Overview
Summary
Income Statement
72
Positive
Balance Sheet
74
Positive
Cash Flow
70
Positive
| Breakdown | Apr 2026 | Apr 2025 | Apr 2024 | Apr 2023 | Apr 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 3.93B | 3.98B | 4.18B | 4.23B | 3.93B |
| Gross Profit | 2.38B | 2.34B | 2.53B | 2.49B | 2.39B |
| EBITDA | 1.11B | 1.29B | 1.51B | 1.19B | 1.27B |
| Net Income | 715.00M | 869.00M | 1.02B | 783.00M | 838.00M |
Balance Sheet | |||||
| Total Assets | 7.89B | 8.09B | 8.17B | 7.78B | 6.37B |
| Cash, Cash Equivalents and Short-Term Investments | 308.00M | 444.00M | 446.00M | 374.00M | 868.00M |
| Total Debt | 2.15B | 2.73B | 3.10B | 2.91B | 2.27B |
| Total Liabilities | 3.87B | 4.09B | 4.65B | 4.51B | 3.64B |
| Stockholders Equity | 4.02B | 3.99B | 3.52B | 3.27B | 2.74B |
Cash Flow | |||||
| Free Cash Flow | 893.00M | 431.00M | 419.00M | 457.00M | 798.00M |
| Operating Cash Flow | 1.00B | 598.00M | 647.00M | 640.00M | 936.00M |
| Investing Cash Flow | -71.00M | 249.00M | 49.00M | -1.35B | -127.00M |
| Financing Cash Flow | -1.07B | -843.00M | -618.00M | 239.00M | -1.04B |
Brown Forman A Technical Analysis
Neutral
25.86
Price Trends
27.27
Negative
27.12
Negative
27.15
Negative
Market Momentum
-0.15
Negative
52.38
Neutral
81.62
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BF.A, the sentiment is Neutral. The current price of 25.86 is below the 20-day moving average (MA) of 26.42, below the 50-day MA of 27.27, and below the 200-day MA of 27.15, indicating a neutral trend. The MACD of -0.15 indicates Negative momentum. The RSI at 52.38 is Neutral, neither overbought nor oversold. The STOCH value of 81.62 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BF.A.
Brown Forman A Risk Analysis
Brown Forman A disclosed 24 risk factors in its most recent earnings report. Brown Forman A reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Brown Forman A Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
69 Neutral | $12.22B | 17.02 | 19.93% | 3.41% | -0.53% | -16.82% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
62 Neutral | $6.60B | 10.85 | 13.98% | 5.64% | -2.90% | 33.92% | |
60 Neutral | $44.85B | 18.45 | 21.39% | 4.80% | -1.84% | -33.01% | |
57 Neutral | $7.64B | ― | -19.15% | 4.08% | -1.30% | -312.85% | |
56 Neutral | $24.02B | 14.41 | 22.08% | 2.92% | -10.48% | ― | |
54 Neutral | $1.84B | -30.24 | -7.30% | ― | -4.69% | -204.08% |
* Consumer Defensive Sector Average
BF.A
Brown Forman A
26.85
-0.05
-0.20%
SAM
Boston Beer
176.85
-36.96
-17.29%
CPB
Campbell Soup
22.88
-8.67
-27.47%
STZ
Constellation Brands
142.27
-22.30
-13.55%
DEO
Diageo
79.78
-23.22
-22.55%
TAP
Molson Coors
40.90
-8.73
-17.59%
Brown Forman A Corporate Events
Business Operations and StrategyM&A Transactions
Brown-Forman Ends Pernod Ricard Talks, Refocuses on Growth
Negative
Apr 28, 2026
On April 28, 2026, Brown-Forman Corporation announced that it and French rival Pernod Ricard had ended talks over a potential business combination after failing to agree on mutually acceptable terms. The discussions, publicly confirmed in March, h...
Business Operations and StrategyM&A Transactions
Brown-Forman Confirms Merger Talks With Pernod Ricard
Positive
Mar 27, 2026
On March 26, 2026, Brown-Forman confirmed it is in discussions with French rival Pernod Ricard over a potential business combination following market rumors. The company emphasized that no terms have been agreed and there is no assurance a transac...
Executive/Board Changes
Brown-Forman Names Jim Peters as New Chief Financial Officer
Positive
Mar 16, 2026
On March 16, 2026, Brown-Forman Corporation announced the election of Jim Peters as Executive Vice President and Chief Financial Officer, effective March 31, 2026. Peters will join the senior executive team and assume the role of principal financi...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.