We use cookies to understand how you use our site and to improve your experience. This includes personalizing content and advertising. To learn more, click here. By continuing to use our site, you accept our use of cookies, revised Privacy Policy and Terms of Service.
You are being directed to ZacksTrade, a division of LBMZ Securities and licensed broker-dealer. ZacksTrade and Zacks.com are separate companies. The web link between the two companies is not a solicitation or offer to invest in a particular security or type of security. ZacksTrade does not endorse or adopt any particular investment strategy, any analyst opinion/rating/report or any approach to evaluating individual securities.
If you wish to go to ZacksTrade, click OK. If you do not, click Cancel.
Nowadays it seems like every ultra-famous celebrity has their own whisky line, leading to increased competition for Brown-Forman (BF.B - Free Report) ) and its iconic Jack Daniel’s brand.
While Brown-Forman is one of the largest producers in the spirits and wine business, the company has grappled with supply chain disruptions along with the impact of higher inflation and interest rates.
Landing a Zacks Rank #5 (Strong Sell) and the Bear of the Day, it may be best to avoid Brown-Forman’s stock at the moment.
Poor Price Performance
Attributed to the growing alternatives regarding whiskey brands and its choppy operating environment, Brown-Forman’s stock has fallen -23% year to date and plummeted -37% over the last year.
Image Source: Zacks Investment Research
Subpar Outlook
Although Brown-Forman believes its turnaround is ahead, the company still expects a volatile operating environment due to global macroeconomic and geopolitical uncertainties.
To that point, earnings for Brown-Forman’s current fiscal 2025 are expected to decline -13% to $1.85 versus $2.14 per share in FY24. Brown-Forman’s bottom line is expected to rebound and rise 5% in FY26 but it’s noteworthy that earnings estimate revisions are noticeably lower over the last 60 days.
Image Source: Zacks Investment Research
Furthermore, Brown-Forman’s sales growth doesn’t necessarily sway investors to think its future earnings potential will be lucrative once its higher operating costs and expenses normalize.
Image Source: Zacks Investment Research
Valuation Concerns
Considering its mediocre top line expansion, Brown-Forman’s stock trades at a high price-to-sales valuation of 4.9X compared to the Zacks Beverages-Alcohol Industry average of 1.6X which is closer to the optimum level of less than 1X.
More concerning is that amid its lowered profitability (and poor stock performance), BF. B still trades at a 23.7X forward earnings multiple which doesn’t offer a discount to the S&P 500’s 23.2X. Plus, this is a premium to the industry average of 17.3X forward earnings.
Image Source: Zacks Investment Research
Bottom Line
Brown-Forman’s stock has been on a slippery downward slope and a rebound doesn’t look likely at this point, especially as there are competition issues to address on top of broader economic factors.
See More Zacks Research for These Tickers
Normally $25 each - click below to receive one report FREE:
Bear of the Day: BrownForman (BF.B)
Nowadays it seems like every ultra-famous celebrity has their own whisky line, leading to increased competition for Brown-Forman (BF.B - Free Report) ) and its iconic Jack Daniel’s brand.
While Brown-Forman is one of the largest producers in the spirits and wine business, the company has grappled with supply chain disruptions along with the impact of higher inflation and interest rates.
Landing a Zacks Rank #5 (Strong Sell) and the Bear of the Day, it may be best to avoid Brown-Forman’s stock at the moment.
Poor Price Performance
Attributed to the growing alternatives regarding whiskey brands and its choppy operating environment, Brown-Forman’s stock has fallen -23% year to date and plummeted -37% over the last year.
Image Source: Zacks Investment Research
Subpar Outlook
Although Brown-Forman believes its turnaround is ahead, the company still expects a volatile operating environment due to global macroeconomic and geopolitical uncertainties.
To that point, earnings for Brown-Forman’s current fiscal 2025 are expected to decline -13% to $1.85 versus $2.14 per share in FY24. Brown-Forman’s bottom line is expected to rebound and rise 5% in FY26 but it’s noteworthy that earnings estimate revisions are noticeably lower over the last 60 days.
Image Source: Zacks Investment Research
Furthermore, Brown-Forman’s sales growth doesn’t necessarily sway investors to think its future earnings potential will be lucrative once its higher operating costs and expenses normalize.
Image Source: Zacks Investment Research
Valuation Concerns
Considering its mediocre top line expansion, Brown-Forman’s stock trades at a high price-to-sales valuation of 4.9X compared to the Zacks Beverages-Alcohol Industry average of 1.6X which is closer to the optimum level of less than 1X.
More concerning is that amid its lowered profitability (and poor stock performance), BF. B still trades at a 23.7X forward earnings multiple which doesn’t offer a discount to the S&P 500’s 23.2X. Plus, this is a premium to the industry average of 17.3X forward earnings.
Image Source: Zacks Investment Research
Bottom Line
Brown-Forman’s stock has been on a slippery downward slope and a rebound doesn’t look likely at this point, especially as there are competition issues to address on top of broader economic factors.