Brown-Forman Corporation
BF-B
$26.73
-2.84%
Brown-Forman Corporation is a leading producer and marketer of premium alcoholic beverages, with a portfolio that includes iconic brands such as Jack Daniel's, Old Forester, Herradura, and Finlandia. As one of the largest American-owned spirits companies, it holds a dominant position in the global whiskey and tequila categories, leveraging a century-and-a-half heritage to maintain brand equity and pricing power. The current investor narrative centers on the company's ability to sustain growth amid shifting consumer preferences toward premiumization and ready-to-drink cocktails, while navigating challenges such as input cost inflation, supply chain constraints, and evolving trade policies. Recent quarterly results have shown modest revenue growth, but the stock's underperformance relative to the broader market has sparked debate about its long-term volume trajectory and margin resilience.…
BF-B
Brown-Forman Corporation
$26.73
Investment Opinion: Should I buy BF-B Today?
Based on the analysis, Brown-Forman is rated a Hold. The stock offers a defensive profile with a 3.55% dividend yield and a 23% discount to industry PE, but growth is sluggish and analyst targets imply limited upside. The thesis is that the stock is fairly valued for its mature growth, but not compelling enough for a Buy.
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BF-B 12-Month Price Forecast
The AI assessment is neutral, reflecting a balanced risk-reward profile. The stock's low beta and attractive dividend make it a defensive choice, but the lack of growth catalysts and modest analyst targets cap upside. The stance would upgrade to bullish if revenue growth accelerates above 5% and the stock breaks above its 50-day moving average, or downgrade to bearish if volume declines and margins compress.
Wall Street consensus
Most Wall Street analysts maintain a constructive view on Brown-Forman Corporation's 12-month outlook, with a consensus price target around $27.94 and implied upside of +4.5% versus the current price.
Average Target
$27.94
0 analysts
Implied Upside
+4.5%
vs. current price
Analyst Count
—
covering this stock
Price Range
$20 - $35
Analyst target range
Brown-Forman is covered by 17 analysts, with a consensus recommendation of 'hold' and a mean recommendation score of 3.16 (where 1 is strong buy and 5 is sell). The average price target is $27.85, implying a 2.1% downside from the current price of $28.44, indicating that analysts see limited upside at current levels. The distribution of ratings includes a mix of holds and a few overweight/outperform calls, but no strong buy recommendations, reflecting a cautious stance. The target price range spans from a low of $20.00 to a high of $35.00, with the high target suggesting potential upside of 23% if the company can accelerate growth or expand margins, while the low target implies a 30% downside if volume declines or input costs escalate. Recent rating actions have been mixed, with Citigroup upgrading from Sell to Neutral in March 2026, while Bernstein downgraded from Outperform to Market Perform, indicating a lack of clear directional conviction among analysts.
Bulls vs Bears: BF-B Investment Factors
Brown-Forman presents a mixed picture: strong brand equity, profitability, and a discounted valuation are countered by sluggish growth, a cautious analyst outlook, and market underperformance. Currently, the bearish evidence is slightly stronger due to the lack of growth catalysts and limited upside per analyst targets. The key tension is whether the company can reignite volume growth through premiumization and RTD expansion, which would justify a re-rating, or if it remains a slow-growth income stock. The outcome of this growth debate will determine the stock's direction over the next 12 months.
Bullish
- Strong brand portfolio and pricing power: Brown-Forman owns iconic brands like Jack Daniel's, which commands premium pricing and customer loyalty. This brand strength supports gross margins of 60.5%, well above the industry average, and provides resilience in competitive markets.
- Attractive valuation with 23% discount to peers: The trailing PE of 16.84x is 23% below the industry average of 22x, offering a margin of safety. The forward PE of 16.72x suggests stable earnings, and the stock trades near the lower end of its historical PE range (12x-80x), indicating conservative expectations.
- Solid profitability and cash generation: Operating margin of 28.2% and net margin of 18.2% demonstrate efficient operations. Free cash flow of $730 million TTM supports a dividend yield of 3.55% and a payout ratio of 59.7%, providing income stability.
- Diversified product portfolio and growth segments: Beyond whiskey, the company has tequila and ready-to-drink segments, with RTD revenue of $146 million in Q3 FY2026. This diversification taps into fast-growing categories, reducing reliance on a single product line.
Bearish
- Modest revenue growth below industry: Q3 FY2026 revenue grew only 2.71% YoY, down from earlier double-digit growth. This is below the industry average, indicating mature market dynamics and potential volume pressures, limiting earnings expansion.
- Analyst consensus is 'hold' with limited upside: The average price target of $27.85 implies a 2.1% downside from the current price of $28.44. With a mean recommendation score of 3.16 (hold), analysts see little near-term upside, reflecting cautious sentiment.
- Underperformance relative to market: The stock is down 3.45% over the past year, while the S&P 500 gained 20.48%. Relative strength over 1 year is -23.93%, indicating significant underperformance and potential investor dissatisfaction.
- High payout ratio limits growth investments: The dividend payout ratio of 59.7% is relatively high, leaving less room for reinvestment in growth initiatives. This could constrain future expansion and innovation, especially in competitive categories.
BF-B Technical Analysis
Brown-Forman's stock is currently in a recovery phase after a significant drawdown, with the price at $28.44 as of August 21, 2026, representing a 3.45% decline over the past year. The stock sits at 89% of its 52-week range (low of $22.61, high of $31.92), indicating it has rebounded strongly from the lows but remains below its peak. This positioning suggests improving investor sentiment, though the stock is still 10.9% off its high, leaving room for further upside if momentum persists.
Beta
0.33
0.33x market volatility
Max Drawdown
-51.9%
Largest decline past year
52-Week Range
$23-$32
Price range past year
Annual Return
-1.9%
Cumulative gain past year
| Period | BF-B Return | S&P 500 |
|---|---|---|
| 1m | -5.0% | +0.1% |
| 3m | +3.9% | +4.4% |
| 6m | +8.6% | +14.6% |
| 1y | -1.9% | +18.6% |
| ytd | +5.0% | +12.9% |
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BF-B Fundamental Analysis
Brown-Forman's revenue trajectory shows steady but modest growth, with the most recent quarter (Q3 FY2026, ended January 31, 2026) reporting revenue of $1,063 million, a 2.71% increase year-over-year. This growth is consistent with the prior quarter's performance, where revenue grew to $1,041 million from $1,095 million in the year-ago period, indicating a deceleration from earlier double-digit growth rates. The company's whiskey segment, which generated $797 million in revenue, remains the primary growth driver, while tequila contributed $60 million and ready-to-drink products added $146 million, reflecting diversification efforts. However, the overall growth rate is below the industry average, suggesting mature market dynamics and potential volume pressures.
Quarterly Revenue
$1.1B
2026-01
Revenue YoY Growth
+2.7%
YoY Comparison
Gross Margin
60.9%
Latest Quarter
Free Cash Flow
$730000000.0B
Last 12 Months
Revenue & Net Income Trends (2 Years)
Revenue Breakdown
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Valuation Analysis: Is BF-B Overvalued?
Given that Brown-Forman is profitable, the price-to-earnings (PE) ratio is the most appropriate valuation metric. The trailing PE stands at 16.84x, while the forward PE is 16.72x, indicating that the market expects earnings to remain relatively stable over the next year. The narrow gap between trailing and forward multiples suggests limited growth expectations, which is consistent with the company's mature industry position and modest revenue growth. Compared to the industry average PE of 22x (based on available data), Brown-Forman trades at a 23% discount, which could be justified by its slower growth profile relative to peers. Historically, the stock's PE has ranged from 12x to 80x over the past five years, with the current level near the lower end of that band, suggesting that the market is pricing in conservative expectations.
PE
16.8x
Latest Quarter
vs. Historical
Low-End
5-Year PE Range 12x~53x
vs. Industry Avg
N/A
Industry PE ~N/A*
EV/EBITDA
12.5x
Enterprise Value Multiple
Investment Risk Disclosure
Financial risks include a moderate debt-to-equity ratio of 0.54, which is manageable but could become a burden if interest rates rise. The company's payout ratio of 59.7% limits retained earnings for growth, and revenue growth of only 2.71% YoY suggests mature market dynamics. Free cash flow of $730 million is positive but may not support aggressive expansion. Additionally, the stock's beta of 0.34 reduces market risk but also implies lower upside potential in bull markets.
FAQ
Key risks include: 1) Financial: moderate debt-to-equity of 0.54 and high payout ratio of 59.7% limiting growth investments. 2) Competitive: intense competition in spirits, especially from craft brands and RTD alternatives. 3) Macro: sensitivity to consumer spending and trade policies, as seen in the stock's underperformance. 4) Company-specific: reliance on Jack Daniel's for a large portion of revenue, with any brand damage impacting results. The most severe risk is a prolonged volume decline, which could push the stock to $20.00.
The 12-month forecast is mixed. The bull case (25% probability) targets $31.92-$35.00, driven by accelerated growth. The base case (50% probability) targets $27.85-$28.44, reflecting modest growth. The bear case (25% probability) targets $20.00-$22.61, if volume declines. The most likely scenario is the base case, with the stock trading near current levels. Key assumptions include stable margins and low-single-digit revenue growth.
BF-B is trading at a trailing PE of 16.84x, which is 23% below the industry average of 22x, suggesting it is undervalued relative to peers. Historically, the stock has traded between 12x and 80x, so the current level is near the lower end, indicating conservative expectations. The market is pricing in slow growth, which is consistent with the company's recent performance. Overall, the stock appears fairly valued to slightly undervalued.
BF-B is a reasonable buy for income-focused investors, given its 3.55% dividend yield and low beta of 0.34. However, the stock offers limited upside, with analyst targets implying a 2.1% downside. The risk-reward is balanced, but the lack of growth catalysts makes it less attractive for growth investors. It is a good buy for those seeking stability and income, but not for those expecting significant capital gains.
BF-B is more suitable for long-term investment due to its low beta (0.34), stable dividend, and defensive nature. Short-term trading is possible but offers limited upside given the narrow analyst target range. The stock's growth is slow, so long-term investors should expect modest capital appreciation and income. A minimum holding period of 3-5 years is recommended to benefit from dividend compounding and potential brand value appreciation.