Long-established in the Beverages - Alcoholic industry, Brown-Forman Corp (BF.B, Financial) has enjoyed a stellar reputation. However, it has recently witnessed a daily loss of 0.94%, juxtaposed with a three-month change of -12.88%. Fresh insights from the GF Score hint at potential headwinds. Notably, its diminished rankings in financial strength, growth, and valuation suggest that the company might not live up to its historical performance. Join us as we dive deep into these pivotal metrics to unravel the evolving narrative of Brown-Forman Corp.
What Is the GF Score?
The GF Score is a stock performance ranking system developed by GuruFocus using five aspects of valuation, which has been found to be closely correlated to the long-term performances of stocks by backtesting from 2006 to 2021. The stocks with a higher GF Score generally generate higher returns than those with a lower GF Score. Therefore, when picking stocks, investors should invest in companies with high GF Scores. The GF Score ranges from 0 to 100, with 100 as the highest rank.
- Financial strength rank: 6/10
- Profitability rank: 8/10
- Growth rank: 3/10
- GF Value rank: 4/10
- Momentum rank: 2/10
Based on the above method, GuruFocus assigned Brown-Forman Corp the GF Score of 68 out of 100, which signals poor future outperformance potential.
Understanding Brown-Forman Corp Business
Brown-Forman Corp is a US-based manufacturer of premium distilled spirits with a market cap of $13.54 billion and sales amounting to $3.975 billion. The company boasts an operating margin of 29.31%. It generates 71% of its revenue in the whiskey category, under well-known Tennessee whiskey brand Jack Daniel's and bourbon brands Woodford Reserve and Old Forester. Additionally, it manufactures and distributes tequila, vodka, rum, gin, and premium wines. The company generates 45% of its sales from its home market, while the bulk of international revenue comes from Europe, Australia, and Latin America. The Brown family controls over 50% of the economic interests and a 67% voting power of the company.
Growth Prospects
A lack of significant growth is another area where Brown-Forman Corp seems to falter, as evidenced by the company's low Growth rank. This suggests that the company may struggle to expand its market share or increase its revenue streams in the near future. The low growth rank indicates potential challenges in scaling operations or innovating within the industry, which could hinder its ability to compete effectively against peers.
Next Steps
Despite its strong profitability, Brown-Forman Corp's financial strength and growth metrics, as highlighted by the GF Score, suggest a potential for underperformance. The company's ability to navigate these challenges will be crucial in determining its future trajectory. Investors should closely monitor how Brown-Forman Corp addresses these issues, particularly in terms of strategic initiatives and market positioning. For those interested in exploring companies with stronger GF Scores, GuruFocus Premium members can utilize the following screener link: GF Score Screen.
This article, generated by GuruFocus, is designed to provide general insights and is not tailored financial advice. Our commentary is rooted in historical data and analyst projections, utilizing an impartial methodology, and is not intended to serve as specific investment guidance. It does not formulate a recommendation to purchase or divest any stock and does not consider individual investment objectives or financial circumstances. Our objective is to deliver long-term, fundamental data-driven analysis. Be aware that our analysis might not incorporate the most recent, price-sensitive company announcements or qualitative information. GuruFocus holds no position in the stocks mentioned herein.
