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:
Below please find a table outlining a discounted cash flow forecast for BF.B, in which we model out valuation assuming a variety of terminal growth rates. To summarize, we found that Brown Forman Corp ranked in the 20th percentile in terms of potential gain offered. We should note, though, that all scenearios modelled for this stock suggest it is overvalued. In terms of the factors that were most noteworthy in this DCF analysis for BF.B, they are:
Interest coverage, a measure of earnings relative to interest payments, is 15.06; that's higher than 79.95% 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 just 21.18% 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 39.53% of tickers in our DCF set.
Terminal Growth Rate in Free Cash Flow
Return Relative to Current Share Price
PEP, HRL, KO, MGPI, and PPC can be thought of as valuation peers to BF.B, in the sense that they are in the Consumer Defensive sector and have a similar price forecast based on DCF valuation.
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