Fact based stock research
Brown-Forman (NYSE:BF.B)

US1156372096

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For every stock, we judge its performance against its peers and rank it on a scale of 1 to 100. The higher the rank, the better the stock performs than its peers. And, we do this for six investment strategies:
Value - shows how good of a value the stock is. Green is "inexpensive"; red is "expensive".

Growth - shows a company's growth potential. Green is "high growth" expected; red is "tough times ahead".

Safety - relates to the amount of debt a company has. Green is low debt level; red is high debt level.

Combined Financial - this isn't an average of the first three ranks but rather a consolidated view across several financial indicators. Green = good; red = tread carefully.

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Brown-Forman stock research in summary

brown-forman.com

ANALYSIS: With an Obermatt Combined Rank of 45 (worse than 55% compared with investment alternatives), Brown-Forman (Distillers & Vintners, USA) shares have somewhat below-average financial characteristics compared with similar stocks. Shares of Brown-Forman are low in value (priced high) with a consolidated Value Rank of 11 (worse than 89% of alternatives). But they show above-average growth (Growth Rank of 67) and are safely financed (Safety Rank of 63, which means below-average debt burdens). ...read more

RECOMMENDATION: A Combined Rank of 45, is a hold recommendation based on Brown-Forman's financial characteristics. Investors looking for growth and low financial risk may find this stock attractive. While the company Brown-Forman exhibits low value (Obermatt Value Rank of 11), which means that the stock price is rather high, it also demonstrates above-average growth (Obermatt Growth Rank of 67). This is a typical case, as high-growth companies are often expensive. Good financing practices (Obermatt Safety Rank of 63) are a double-edged sword: if the company continues growing, low debt limits shareholder returns. But if the company increases its debt, it will also increase risk. In other words, this is an investment on the safer side, despite the above-average price (low value). Obermatt Premium subscribers can further check the stock’s Sentiment Ranks, which also flow into the Obermatt 360° View for investors. ...read more

Latest Obermatt Ranks


360° View^new
Sentiment Rank^new
Value Rank	n/a
Growth Rank	n/a
Safety Rank	n/a
Combined Rank	n/a

Country	USA
Industry	Distillers & Vintners
Index	Energy Efficient, S&P US Consumer, S&P US Food & Beverage, S&P 500
Size class	X-Large

This stock has achievements: Top 10 Stock.

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Research History: Brown-Forman

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	33	9	16	n/a
GROWTH
GROWTH	8	23	51	n/a
SAFETY
SAFETY	38	61	65	n/a
SENTIMENT
SENTIMENT	n/a	30	16	^new
360° VIEW
360° VIEW	n/a	9	16	^new

Most recent update of the stock research: . Financial reporting date used for calculating ranks: . Stock research history is based on the Obermatt Method. The higher the rank, the better Brown-Forman is in the corresponding investment strategy.
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Combined financial peformance in Detail

RESEARCH HISTORY	2021	2022	2023	2024
VALUE
VALUE	33	9	16	n/a
GROWTH
GROWTH	8	23	51	n/a
SAFETY
SAFETY	38	61	65	n/a
COMBINED
COMBINED	11	14	39	n/a

Last update of combined financial performance: . Stock analysis on combined financial performance: The higher the rank of Brown-Forman the better the performance.

Value Metrics in Detail

ANALYSIS: With an Obermatt Value Rank of 11 (worse than 89% compared with alternatives), Brown-Forman shares are significantly more expensive than comparable stocks. The Value Rank is based on consolidating four value indicators, with three out of four indicators below average for Brown-Forman. Only the metric dividend yield has an above-average rank, reflecting that dividend practices are expected to be higher than 52% of comparable companies, making the stock an attractive buy for dividend investors. However, dividend investors may get disappointed because all other critical financial indicators are below the market median: Price-to-Sales is 5 which means that the stock price compared with what market professionals expect for future profits is higher than 95% of comparable companies, indicating a low value concerning Brown-Forman's sales levels. The same is valid for Price-to-Profit (also referred to as price-earnings, P/E) with a rank of 16 which means that the stock price compared with what market professionals expect for future profit levels is higher than 84% of comparable companies. In addition, Price-to-Book (also referred to as market-to-book ratio) with a Price-to-Book Rank of 15 is also low. Compared with invested capital, the stock price is higher than for 85% of comparable investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Value Rank of 11, is a sell recommendation based on Brown-Forman's stock price compared with the company's operational size and dividend yields. Should dividend investors pick Brown-Forman? The company-reported financials speak against it. The company is expensive compared with revenue and invested capital levels, two reliable company size indicators. In addition, it currently has a low level of profits. How can future dividends be paid in the case that profits remain low? Dividend investors should choose Brown-Forman only if they reasonably expect the low current profit levels to be transitory. We recommend further analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks, including the 360° View, before making an investment decision, which is essential in this case, as the financial indicators are inconclusive. ...read more

VALUE METRICS	2021	2022	2023	2024
PRICE VS. REVENUES (P/S)
PRICE VS. REVENUES (P/S)	29	1	5	n/a
PRICE VS. PROFITS (P/E)
PRICE VS. PROFITS (P/E)	43	7	14	n/a
PRICE VS. CAPITAL (Market-to-Book)
PRICE VS. CAPITAL (Market-to-Book)	12	17	14	n/a
DIVIDEND YIELD
DIVIDEND YIELD	56	45	52	n/a
CONSOLIDATED RANK: VALUE
CONSOLIDATED RANK: VALUE	33	9	16	n/a

Last update of Value Rank: . Stock analysis on value ratios: The higher the rank, the lower the value ratio of Brown-Forman; except for dividend yield where the rank is higher, the higher the yield.

Growth Metrics in Detail

ANALYSIS: With an Obermatt Growth Rank of 67 (better than 67% compared with alternatives), Brown-Forman shows an above-average growth dynamic in its industry. Investors also speak of positive momentum. The Growth Rank is based on consolidating four value indicators, with all but one indicator above average for Brown-Forman. Sales Growth has a value of 57 which means that currently professionals expect the company to grow more than 57% of its competitors. Profit Growth with a value of 65 and Capital Growth with a rank of 72 means that currently, professionals expect the company to grow both profits and invested capital more than of its competitors. But Stock Returns has only a rank of 35, which means that stock returns have recently been below 65% of alternative investments. ...read more

RECOMMENDATION: The overall picture with a consolidated Growth Rank of 67, is a buy recommendation for growth and momentum investors. Brown-Forman has only one below-average growth indicator, the stock returns. This is probably the least reliable growth indicator, because it measures company and investor expectations at the same time. The three other growth indicators, which are all positive for Brown-Forman, are more reliable measures of growth momentum. For this reason, the company seems to be on a good trajectory, unless you think the current period is not representative, because of unique events that will not be repeated in the future. While momentum is a popular investment factor, the value aspect might be the more important one, in the longer term. We recommend analyzing the stock with Obermatt’s Value, Safety, and Sentiment Ranks to arrive at a 360° View of the stock purchase case. ...read more

GROWTH METRICS	2021	2022	2023	2024
REVENUE GROWTH
REVENUE GROWTH	28	56	59	n/a
PROFIT GROWTH
PROFIT GROWTH	47	44	59	n/a
CAPITAL GROWTH
CAPITAL GROWTH	n/a	34	41	n/a
STOCK RETURNS
STOCK RETURNS	10	27	39	n/a
CONSOLIDATED RANK: GROWTH
CONSOLIDATED RANK: GROWTH	8	23	51	n/a

Last update of Growth Rank: . Stock analysis on growth metrics: The higher the rank, the higher the growth and returns of Brown-Forman.

Safety Metrics in Detail

ANALYSIS: With an Obermatt Safety Rank of 63 (better than 63% compared with alternatives), the company Brown-Forman has financing practices on the safer side, which mean that their overall debt burden is lower than average. This doesn't mean that the business of Brown-Forman is safe, it only means that the company is on the safer side regarding possible bankruptcy, assuming that public reporting is correct. The Safety Rank is based on consolidating three financing indicators, with two out of three indicators above-average for Brown-Forman. Refinancing is at 59, meaning the portion of the debt that is about to be refinanced is below average. It has less debt in the refinancing stage than 59% of its competitors. Liquidity is also good at 77, meaning the company generates more profit to service its debt than 77% of its competitors. This indicates that the company is safer when it comes to debt service. However, Leverage is rather large at 36, which means the company has an above-average debt-to-equity ratio. It has more debt than 64% of its competitors. ...read more

RECOMMENDATION: With a consolidated Safety Rank of 63 (better than 63% compared with alternatives), Brown-Forman has a financing structure that is safer than that of its competitors. This is not bad if things go well. The higher debt level means better returns to shareholders if things go well. Many top-performing companies operate with higher debt levels, and Brown-Forman could be in that group. But if you expect the environment to turn rougher, the higher leverage could become a problem. The same is valid if you expect interest rates to rise. That could squeeze shareholder returns, which so far have benefitted from better conditions. In the long-term, investors may have a debt challenge with Brown-Forman and should also compare Obermatt’s Value, Growth, and Sentiment Ranks before making a decision. ...read more

SAFETY METRICS	2021	2022	2023	2024
LEVERAGE
LEVERAGE	40	28	38	n/a
REFINANCING
REFINANCING	54	63	57	n/a
LIQUIDITY
LIQUIDITY	44	81	77	n/a
CONSOLIDATED RANK: SAFETY
CONSOLIDATED RANK: SAFETY	38	61	65	n/a

Last update of Safety Rank: . Stock analysis on safety metrics: The higher the rank, the lower the leverage of Brown-Forman and the more cash is available to service its debt.

Sentiment Metrics in Detail

SENTIMENT	2021	2022	2023	2024
ANALYST OPINIONS
ANALYST OPINIONS	n/a	9	19	^new
OPINIONS CHANGE
OPINIONS CHANGE	n/a	50	45	^new
PRO HOLDINGS
PRO HOLDINGS	n/a	50	18	^new
MARKET PULSE
MARKET PULSE	n/a	68	75	^new
CONSOLIDATED RANK: SENTIMENT
CONSOLIDATED RANK: SENTIMENT	n/a	30	16	^new

Last update of Sentiment Rank: . Stock analysis on sentiment metrics: The higher the rank, the more positive the sentiment for Brown-Forman.
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