Louisville, Kentucky-based Brown-Forman Corporation (BF.B) manufactures, distills, bottles, imports, exports, markets, and sells various alcoholic beverages. Valued at $12.9 billion by market cap, the company’s products include branded whiskey, vodka, wines, tequila, bourbon, and gin.
Companies worth $10 billion or more are generally described as “large-cap stocks,” and BF.B perfectly fits that description, with its market cap exceeding this mark, underscoring its size, influence, and dominance within the beverages - wineries & distilleries industry. Brown-Forman's strengths include its premium spirits portfolio, led by iconic brands such as Jack Daniel's, and its strong brand equity, which enables premium pricing and high profit margins. The company has also taken proactive steps to enhance operational efficiency through restructuring, aiming for long-term savings and a more agile organization.
Despite its notable strength, BF.B slipped 45.2% from its 52-week high of $49.89, achieved on Oct. 18, 2024. Over the past three months, BF.B stock gained 5.4%, underperforming the Dow Jones Industrials Average’s ($DOWI) 7.6% gains during the same time frame.
In the longer term, shares of BF.B dipped 28.1% on a YTD basis and fell 41.4% over the past 52 weeks, significantly underperforming DOWI’s YTD gains of 7.6% and 9.9% returns over the last year.
To confirm the bearish trend, BF.B has been trading below its 50-day moving average since late October, 2024, with minor fluctuations. The stock is trading below its 200-day moving average over the past year, with slight fluctuations.
On Aug. 28, BF.B shares closed down by 4.9% after reporting its Q1 results. Its revenue stood at $924 million, down 2.8% year-over-year. The company’s EPS declined 12.2% from the year-ago quarter to $0.36.
In the competitive arena of beverages - wineries & distilleries, Diageo plc (DEO)has taken the lead over BF.B, showing resilience with a 21.3% downtick on a YTD basis and 24.7% losses over the past 52 weeks.
Wall Street analysts are cautious on BF.B’s prospects. The stock has a consensus “Hold” rating from the 18 analysts covering it, and the mean price target of $32.08 suggests a potential upside of 17.4% from current price levels.
