Brown-Forman B (BF.B) AI Stock Analysis

• Market Cap: $16.28B
• Dividend Yield: 2.54%
• Average Volume (3M): 3.72M
• Price to Earnings (P/E): 16.6
• Beta (1Y): 0.51
• Revenue Growth: -5.11%
• EPS Growth: 3.64%
• Country: US
• Employees: 5,700
• Sector: Consumer Defensive
• Sector Strength: 68
• Industry: Beverages - Alcoholic
• EPS (TTM): 2.09
• Shares Outstanding: 303,539,950
• 10 Day Avg. Volume: 3,723,744
• 30 Day Avg. Volume: 3,723,730
• PEG Ratio: 4.55
• Price to Book (P/B): N/A
• Price to Sales (P/S): 4.05
• Price to Cash Flow (P/CF): 12.90
• P/FCF Ratio: 12.00
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $40.56
• Price Target Upside: 17.06% Upside
• Rating Consensus: Hold
• Number of Analyst Covering: 9

Brown-Forman B's strong financial performance, characterized by solid margins and a stable equity position, contributes significantly to its stock score. While revenue growth challenges exist, the company's valuation metrics are favorable, making it an attractive investment opportunity. Technical indicators suggest moderate upward momentum, supporting a positive outlook despite the need for enhanced cash management.

Positive Factors

Earnings

For the second consecutive quarter, BFB outperformed expectations and held guidance, which is encouraging considering all the challenges currently facing distilled spirits and whiskey.

Strategic Initiatives

BFB announced a series of strategic initiatives aimed at enhancing long-term growth.

Negative Factors

Brand Perception

The brand's move into flavors and RTDs has expanded the revenue base but diluted the brand image, altering consumers' perception.

Tariffs

EU tariffs on American whiskey are due to be reinstated at a rate of 50% in the event there is no concession prior to the specified date.

Brown-Forman B Business Overview & Revenue Model

Company Description

Brown-Forman Corporation is a global leader in the beverage alcohol industry, primarily engaged in the production, marketing, and distribution of high-quality spirits and wines. Founded in 1870 and headquartered in Louisville, Kentucky, the company is renowned for its diverse portfolio of brands, including Jack Daniel's, Woodford Reserve, and Old Forester in the whiskey segment, as well as premium tequila brands like Herradura and El Jimador. Brown-Forman operates in numerous regions worldwide, serving markets in North America, Europe, Asia, and Latin America.

How the Company Makes Money

Brown-Forman generates revenue through the sale of its spirits and wines across various channels, including wholesale distribution to retailers, direct-to-consumer sales, and through partnerships with distributors and retailers globally. The company's key revenue streams include the sale of its flagship whiskey brand, Jack Daniel's, which accounts for a significant portion of its earnings, as well as other spirits like bourbon, tequila, and vodka. Brown-Forman's earnings are also bolstered by its strategic partnerships and distribution agreements that enable its products to reach a wider audience. Additionally, the company's focus on innovation and brand investment helps maintain its competitive edge and drive growth in both established and emerging markets.

Brown-Forman B Financial Statement Overview

Summary

Brown-Forman B demonstrates strong profitability and financial stability, with healthy margins and a solid equity position. The company faces challenges in revenue growth, which it needs to address to sustain its financial performance. Cash flow shows positive trends, but further improvements in cash conversion and management could enhance financial flexibility.

Income Statement

Brown-Forman B has maintained a strong Gross Profit Margin of 59.3% in the TTM, indicative of effective cost management. The Net Profit Margin stands at 24.4%, reflecting solid profitability. However, a slight decline in revenue over the TTM period by -3.18% suggests the need for revenue growth initiatives. The EBIT margin remains robust at 31.6%, supporting operational efficiency.

Balance Sheet

The company maintains a healthy equity ratio of 47.4% in the TTM, highlighting financial stability. However, the Debt-to-Equity Ratio of 0.67 suggests moderate leverage, which is manageable but requires monitoring. Return on Equity (ROE) is strong at 25.9%, signifying effective use of shareholders' equity to generate profit.

Cash Flow

Free Cash Flow grew by 27.45% in the TTM, indicating improved cash generation. The Operating Cash Flow to Net Income ratio of 0.74 suggests efficient conversion of income to cash, though there is room for improvement. The Free Cash Flow to Net Income ratio of 0.54 shows a positive cash flow position but indicates the need for careful cash management.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
4.04B	4.18B	4.23B	3.93B	3.46B	3.36B
	Gross Profit
2.40B	2.53B	2.49B	2.39B	2.09B	2.13B
	EBIT
1.28B	1.41B	1.13B	1.20B	1.17B	1.09B
	EBITDA
1.46B	1.51B	1.31B	1.31B	1.09B	1.17B
	Net Income Common Stockholders
989.00M	1.02B	783.00M	838.00M	903.00M	827.00M
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
599.00M	446.00M	374.00M	868.00M	1.15B	675.00M
	Total Assets
8.07B	8.17B	7.78B	6.37B	6.52B	5.78B
	Total Debt
2.86B	3.10B	2.91B	2.27B	2.56B	2.60B
	Net Debt
2.26B	2.65B	2.54B	1.40B	1.41B	1.93B
	Total Liabilities
4.25B	4.65B	4.51B	3.64B	3.87B	3.80B
	Stockholders Equity
3.82B	3.52B	3.27B	2.74B	2.66B	1.98B
Cash Flow		Free Cash Flow
534.00M	419.00M	457.00M	798.00M	755.00M	611.00M
	Operating Cash Flow
731.00M	647.00M	640.00M	936.00M	817.00M	724.00M
	Investing Cash Flow
270.00M	49.00M	-1.35B	-127.00M	98.00M	-141.00M
	Financing Cash Flow
-952.00M	-618.00M	239.00M	-1.04B	-485.00M	-191.00M

Brown-Forman B Technical Analysis

• Technical Analysis Sentiment: Neutral
• Last Price: 34.65
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BF.B, the sentiment is Neutral. The current price of 34.65 is above the 20-day moving average (MA) of 34.55, above the 50-day MA of 33.26, and below the 200-day MA of 41.01, indicating a neutral trend. The MACD of 0.52 indicates Positive momentum. The RSI at 51.92 is Neutral, neither overbought nor oversold. The STOCH value of 28.34 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Neutral sentiment for BF.B.

Brown-Forman B Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
TAP	74 Outperform	$11.94B	11.01	8.54%	3.04%	-0.64%	22.45%
BF.B	72 Outperform	$16.28B	16.57	27.99%	2.54%	-5.11%	3.64%
BF.A	72 Outperform	$16.28B	16.29	27.99%	2.58%	-5.11%	3.64%
DEO	66 Neutral	$59.27B	16.53	35.83%	3.83%	-1.27%	-12.18%
Sector *	62 Neutral	$20.49B	13.68	-10.76%	7.35%	1.61%	5.91%
SAM	61 Neutral	$2.56B	46.23	5.99%	―	0.21%	-20.69%
STZ	61 Neutral	$32.06B	47.50	7.94%	2.28%	3.69%	-55.78%