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Brown-Forman B (BF.B)
NYSE:BF.B
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Brown-Forman B
(NYSE:BF.B)
Rating:69Neutral
Price Target:
$31.00
▲(6.57%Upside)
Positive Factors
Cost Savings
These actions are expected to net $70-$80 mm in annualized savings.
Strategic Initiatives
BFB announced a series of strategic initiatives aimed at enhancing long-term growth.
Valuation
Valuation is almost too cheap to ignore after the selloff.
Negative Factors
Earnings and Guidance
A notable earnings miss and weak FY26 guide that came in well below expectations will do little to build confidence on the near-term setup for BFB.
Market Challenges
Weak consumer takeaway, a supply glut of whiskey, consumer challenges, and tariff uncertainty keep us on the sidelines.
Tariff Risks
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 (BF.B) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$13.48B
Dividend Yield3.2%
Average Volume (3M)6.36M
Price to Earnings (P/E)15.5
Beta (1Y)0.60
Revenue Growth-4.90%
EPS Growth-14.49%
CountryUS
Employees5,700
SectorConsumer Defensive
Sector Strength53
IndustryBeverages - Wineries & Distilleries
Share Statistics
EPS (TTM)0.31
Shares Outstanding303,608,900
10 Day Avg. Volume4,028,108
30 Day Avg. Volume6,362,069
Financial Highlights & Ratios
PEG Ratio-6.36
Price to Book (P/B)9.57
Price to Sales (P/S)0.00
P/FCF Ratio68.46
Enterprise Value/Market Cap2.51
Enterprise Value/Revenue2.06
Enterprise Value/Gross Profit14.10
Enterprise Value/Ebitda5.72
Forecast
1Y Price Target
$32.00Price Target Upside10.00% Upside
Rating ConsensusHold
Number of Analyst Covering14
Brown-Forman B Business Overview & Revenue Model
Company DescriptionBrown-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 MoneyBrown-Forman Corporation generates revenue primarily through the sale of its premium spirits and wines across various global markets. The company's key revenue streams are derived from its diverse portfolio of renowned brands, led by its flagship product, Jack Daniel's Tennessee Whiskey, which accounts for a significant portion of its earnings. Revenue is further bolstered by sales of other popular brands such as Woodford Reserve, Finlandia Vodka, and Old Forester. Brown-Forman's earnings are enhanced by its strong distribution network, strategic marketing efforts, and partnerships with distributors and retailers worldwide, allowing it to maintain a robust presence in both established and emerging markets. Additionally, the company's focus on innovation and brand extensions supports its revenue growth by appealing to a broad spectrum of consumer preferences.
Brown-Forman B Earnings Call Summary
Earnings Call Date:Jun 05, 2025
(Q3-2025)
| % Change Since: -11.66%|
Next Earnings Date:Aug 27, 2025
Earnings Call Sentiment Neutral
The earnings call presented a mixed outlook with strong growth in emerging markets and key brands like Woodford Reserve, but faced challenges with overall net sales decline, competitive pressures in the tequila market, and uncertainties related to tariffs. The workforce reduction and restructuring efforts indicate a focus on long-term efficiency and growth.Q3-2025 Updates
Positive Updates
Sequential Improvement in Top and Bottom Line Results
The company delivered sequentially stronger top and bottom line results as it entered the second half of the fiscal year, with January being the fifth consecutive month of positive 3-month rolling organic net sales trends.
Strong Performance of Key Brands
Woodford Reserve and Jack Daniel's Tennessee Whiskey were the largest drivers of organic net sales growth, with Woodford Reserve achieving 10% organic net sales growth driven by higher volumes and positive price mix.
Emerging Markets Lead Growth
Emerging international markets delivered an 8% organic net sales increase, led by strong double-digit growth in Turkey and Brazil.
Successful Route-to-Consumer Strategy
The company successfully executed its route-to-consumer changes in Japan and is on schedule to launch its own distribution in Italy by May 1, 2025.
Negative Updates
Overall Decrease in Reported Net Sales
Reported net sales decreased by 4% in the first 9 months of fiscal 2025, with organic net sales growing only 2% after adjustments.
Challenges in the Tequila Market
El Jimador and Herradura tequilas faced challenges in the U.S. and Mexico due to a competitive environment and economic challenges, leading to declines in performance.
Impact of Tariffs and Geopolitical Uncertainties
The operating environment remains dynamic with uncertainties related to tariffs, particularly with the potential reintroduction of EU tariffs.
Restructuring and Workforce Reduction
The company announced a 12% reduction in its global workforce and the closure of its Louisville-based Cooperage, expecting to incur $60 to $70 million in restructuring charges.
Company Guidance
In the Brown-Forman Corporation's third-quarter earnings call for fiscal year 2025, the company highlighted a number of key metrics and strategic actions. Organic net sales grew by 2%, while reported net sales saw a 4% decrease due to divestitures and foreign exchange impacts. The company experienced a 10% organic net sales growth for Woodford Reserve, driven by higher volumes and positive price mix, with Jack Daniel's Tennessee Whiskey also showing a 2% increase in organic net sales. The company maintained its full-year outlook for organic net sales and operating income growth despite ongoing challenges, including tariffs and a dynamic operating environment. Brown-Forman reported a 6% decrease in organic gross profit, alongside a 13% decline in reported operating income, yet achieved a 5% growth in organic operating income. The company also discussed its strategic initiatives, including reducing its workforce by 12%, anticipated to deliver annual savings of $70 million to $80 million. These changes come alongside a restructuring of the executive leadership team and the closure of the Louisville-based Cooperage, which is expected to generate over $30 million in proceeds. Brown-Forman reaffirmed its commitment to innovation and strategic investments, poised to leverage and adapt to the evolving market conditions.Brown-Forman B Financial Statement Overview
Summary
Brown-Forman B shows strong profitability with a high Gross Profit Margin and strong Net Profit Margin. However, the slight decline in revenue and moderate leverage are areas of concern that need addressing.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.78
Positive
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.75
Positive
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.70
Positive
| 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 |
| EBITDA | 1.46B | 1.51B | 1.31B | 1.31B | 1.09B | 1.17B |
| Net Income | 989.00M | 1.02B | 783.00M | 838.00M | 903.00M | 827.00M |
Balance Sheet | ||||||
| Total Assets | 8.07B | 8.17B | 7.78B | 6.37B | 6.52B | 5.78B |
| Cash, Cash Equivalents and Short-Term Investments | 599.00M | 446.00M | 374.00M | 868.00M | 1.15B | 675.00M |
| Total Debt | 2.86B | 3.10B | 2.91B | 2.27B | 2.56B | 2.60B |
| 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
Negative
29.09
Price Trends
30.82
Negative
32.18
Negative
36.31
Negative
Market Momentum
-0.52
Negative
54.20
Neutral
82.66
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For BF.B, the sentiment is Negative. The current price of 29.09 is above the 20-day moving average (MA) of 27.06, below the 50-day MA of 30.82, and below the 200-day MA of 36.31, indicating a neutral trend. The MACD of -0.52 indicates Negative momentum. The RSI at 54.20 is Neutral, neither overbought nor oversold. The STOCH value of 82.66 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for BF.B.
Brown-Forman B Risk Analysis
Brown-Forman B disclosed 24 risk factors in its most recent earnings report. Brown-Forman B 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 B Peers Comparison
Overall Rating
UnderperformOutperform
Sector (65)
Financial Indicators
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
73 Outperform | $2.39B | 13.89 | 11.33% | 3.35% | 6.18% | 61.39% | |
71 Outperform | $58.65B | 16.25 | 35.83% | 3.09% | -1.21% | -8.89% | |
69 Neutral | $13.48B | 15.49 | 23.14% | 3.20% | -4.90% | -14.49% | |
65 Neutral | $26.88B | 15.20 | -4.27% | 3.19% | 1.02% | 1.89% | |
65 Neutral | $2.21B | 32.04 | 7.36% | ― | 0.79% | -24.27% | |
65 Neutral | $30.07B | 49.10 | -5.05% | 2.41% | -0.47% | -117.62% | |
65 Neutral | $10.02B | 9.93 | 7.90% | 3.79% | -5.17% | -0.74% |
* Consumer Defensive Sector Average
Performance Comparison
BF.B
Brown-Forman B
29.09
-14.02
-32.52%
SAM
Boston Beer
197.67
-90.60
-31.43%
CCU
Compania Cervecerias Unidas SA
13.09
1.11
9.27%
STZ
Constellation Brands
172.12
-82.59
-32.43%
DEO
Diageo
105.49
-21.79
-17.12%
TAP
Molson Coors
49.81
0.19
0.38%
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.