Stock of the Day

July 13, 2020

Brown-Forman (BF.A)

$27.96
-$6.33 (-18.5%)
Market Cap: $15.26B

About Brown-Forman

Brown-Forman Corporation manufactures, bottles, imports, exports, markets, and sells various alcoholic beverages. It provides spirits, wines, whiskey spirits, whiskey-based flavored liqueurs, ready-to-drink and ready-to-pour products, ready-to-drink cocktails, vodkas, tequilas, champagnes, brandy, bourbons, and liqueurs. The company offers its products primarily under the Jack Daniel's, Woodford Reserve, Canadian Mist, GlenDronach, BenRiach, Glenglassaugh, Old Forester, Early Times, Slane Irish Whiskey, Coopers' Craft, el Jimador, Herradura, New Mix, Pepe Lopez, Antiguo, Finlandia, Korbel Champagne, and Sonoma-Cutrer brands. It is also involved in the sale of used barrels, bulk whiskey, and wine; and provision of contract bottling services. The company serves retail customers and consumers through distributors or state governments; and retailers, wholesalers, and provincial governments directly. It has operations in the United States, the United Kingdom, Germany, Australia, Mexico, and internationally. Brown-Forman Corporation was founded in 1870 and is headquartered in Louisville, Kentucky.

Brown-Forman Bull Case

Here are some ways that investors could benefit from investing in Brown-Forman Co.:

  • The current stock price is around $75, reflecting the company's strong brand presence in the alcoholic beverage market.
  • Brown-Forman Co. has a diverse portfolio of well-known brands, including Jack Daniel's and Woodford Reserve, which can provide stability and growth potential.
  • The company has a long history of operations since 1870, indicating a strong foundation and experience in the industry.
  • Recent reports indicate that the company is actively involved in international markets, which can help mitigate risks associated with domestic sales fluctuations.
  • Brown-Forman Co. has been expanding its product offerings, including ready-to-drink cocktails, which align with current consumer trends towards convenience.

Brown-Forman Bear Case

Investors should be bearish about investing in Brown-Forman Co. for these reasons:

  • Recent earnings reports showed that net sales for key whiskey products were flat, indicating potential stagnation in a crucial segment.
  • The company's tequila and ready-to-drink portfolios experienced declines of 14% and 6%, respectively, which could signal challenges in adapting to market demands.
  • Brown-Forman Co. has warned of tariff uncertainties that could impact pricing and profitability, creating an unpredictable financial environment.
  • Overall market conditions for alcoholic beverages can be volatile, influenced by changing consumer preferences and economic factors.
  • Investors may be concerned about the company's ability to maintain growth in a competitive landscape with emerging brands and products.
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