BF.B - Embedded Expectations Analysis - 2020 12 02
Brown-Forman Corporation (BF.B:USA) currently trades at a historical high relative to UAFRS-based (Uniform) earnings, with a 45.7x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may be concerned about the e commerce channel, their ability to mitigate down-trading in their portfolio, and their Jack Daniel's brandSpecifically, management may lack confidence in their ability to grow the e-commerce channel and improve the spirit-based ready-to-drink (RTD) market in the U.S. Moreover, they may be downplaying the impact of down-trading on their portfolio and they might have concerns about their ability to continue investing effectively in advertising and SG&A. Furthermore, they may be concerned about their new Woodford Reserve ads, the new releases from the Jack Daniel's brand, and the performance of Jack Daniel's Tennessee Whiskey going forward. In addition, they may be exaggerating New Mix as their number one growth driver and the potential sales of tequila and whiskey. Finally, management may be concerned about the travel retail business' ability to recover
Brown-Forman primarily manufactures, bottles, imports, exports, markets, and sells a range of alcoholic beverage brands. Co.'s principal brands include, among other, Jack Daniel's Tennessee Whiskey; Jack Daniel's Tennessee Honey; Jack Daniel's RTDs; Gentleman Jack Rare Tennessee Whiskey; Jack Daniel's Tennessee Fire; Jack Daniel's Single Barrel Collection; Jack Daniel's Winter Jack; Jack Daniel's Sinatra Select; Jack Daniel's No. 27 Gold Tennessee Whiskey; Jack Daniel's Tennessee Rye; Korbel California Champagnes; Korbel California Brandy; Woodford Reserve Kentucky Bourbon; Woodford Reserve Double Oaked; Woodford Reserve Kentucky Rye Whiskey; Finlandia Vodkas; and Slane Irish Whiskey.
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