Brown-Forman Corporation manufactures, bottles, imports, exports, markets, and sells various alcoholic beverages worldwide. It provides spirits, wines, ready-to-drink cocktails, whiskey, vodka, tequilas, champagnes, wines, brandy, and liqueur. The company was founded in 1870 and is based in Louisville, Kentucky.
BF.B Price Forecast Based on DCF Valuation
DCF Fair Value Target:
The table below illustrates the output of a discounted cash flow forecast using a variety of scenarios for Brown Forman Corp. To summarize, we found that Brown Forman Corp ranked in the 20th percentile in terms of potential gain offered. Our DCF analysis suggests the stock is overvalued by about 77.67%. The most interesting components of our discounted cash flow analysis for Brown Forman Corp ended up being:
The company's debt burden, as measured by earnings divided by interest payments, is 15.06; that's higher than 79.38% of US stocks in the Consumer Defensive sector that have positive free cash flow.
The business' balance sheet suggests that 7% of the company's capital is sourced from debt; this is greater than only 21.2% of the free cash flow producing stocks we're observing.
BF.B's estimated cost of debt, based largely on its market capitalization and its interest coverage ratio, is 3%; for context, that number is higher than 39.47% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
For other companies in the Consumer Defensive that have a similar discounted cashflow valuation profile (and ensuing price forecasts) as BF.B, try DL, PEP, PPC, HRL, and KO.
Growth in RTD alcohol has exceeded Brown-Formanâs expectations this year: with the spirits giant championing a boom in Jack Danielâs RTD and recent acquisition Part Time Rangers. But is the growth in RTD alcohol just a reaction to coronavirus or a long-term trend?
LOUISVILLE, Ky.--(BUSINESS WIRE)--Brown-Forman Corporation (NYSE: BFA, BFB) announced financial results for its second quarter and first half of fiscal 2021. For the second quarter, the company’s reported net sales1 of $985 million were essentially flat (+4% on an underlying basis2) compared to the same prior-year period. In the quarter, reported operating income decreased 6% to $330 million (+6% on an underlying basis) and diluted earnings per share declined 15% to $0.50. For the first six mon