BF.B - Embedded Expectations Analysis - 2021 08 10
Brown-Forman Corporation (BF.B:USA) currently trades near historical high relative to UAFRS-based (Uniform) earnings, with a 42.0x Uniform P/E. At these levels, the market has bullish expectations for the firm, but management may have concerns about product growth, supply chain disruptions, and higher fixed costs.Specifically, management may have concerns about the impact of the pandemic on their supply chain, their fiscal year financial results, and higher fixed costs. Also, they may lack confidence in their ability to raise prices, maintain Jack Daniel's growth, particularly Jack Daniel's Apple, sustain Tennessee Whiskey volume in Brazil, and continue strong Ready-to-Drink portfolio growth. Moreover, they may be overstating the potential of their Part Time Rangers acquisition and their newly launched Integrated Marketing Communications Organization (IMC), as well as the pandemic trend of a shift from wine and beer to spirits.
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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