Brown-Forman Corporation (BF-B): Among the Best Alcohol Stocks to Buy According to Analysts
AInvestSaturday, Feb 1, 2025 11:16 pm ET
4min read
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Brown-Forman Corporation (BF-B), a leading spirits and wine producer, has been gaining traction among analysts as one of the best alcohol stocks to buy. With a strong brand portfolio, growth potential, and attractive financial performance, the company presents an appealing investment opportunity for those looking to enter the alcohol industry.

Brown-Forman's portfolio of iconic and premium brands, such as Jack Daniel's, Woodford Reserve, and Old Forester, has been a significant driver of its long-term growth potential. These brands have a strong global presence and appeal to discriminating consumers worldwide. In the fiscal year 2024, Jack Daniel's Tennessee Whiskey's reported net sales declined 6% (-5% organic), but it remained the company's largest brand by volume and value. Additionally, the company's super-premium expressions, such as Jack Daniel's Single Barrel Rye Barrel Proof and Jack Daniel's Sinatra, have shown growth and contributed to the overall portfolio's success. The diversity and strength of Brown-Forman's brand portfolio, coupled with its commitment to innovation and responsible building of the company, have positioned it well for continued growth in the future.

Brown-Forman's strategic initiatives, such as the acquisition of Diplomático and Gin Mare, have played a significant role in enhancing its competitive position. These acquisitions have contributed to the company's growth and helped it maintain its position as a leading spirits and wine producer. In the fiscal year 2024, Diplomático and Gin Mare drove the significant increase in the Rest of Portfolio's reported net sales growth of 61% (+15% organic), led by the Developed International markets and the United States. This growth was achieved despite the challenges faced by the spirits industry during the year.

Brown-Forman's financial performance has been strong, with revenue of $4.18 billion and earnings of $1.02 billion in fiscal 2024, representing a 30.78% increase from the previous year. The company's strong financial performance, coupled with its attractive valuation, makes it an appealing investment opportunity. Brown-Forman's forward PE ratio is around 15.66, which is relatively low compared to other consumer staples stocks and may indicate that the stock is undervalued. Additionally, the company's price-to-book ratio is around 4.5, which is below its 5-year average, further suggesting that the stock may be undervalued.

Analysts have a positive outlook on Brown-Forman's stock, with an average rating of "Hold" and a 12-month stock price forecast of $46.45, indicating a 40.72% increase from the latest price. This suggests that analysts believe the stock has significant upside potential. The company's dividend history, with a 41-year streak of increasing its quarterly cash dividend, is another attractive feature for investors seeking steady income.



Despite the challenges faced by the alcohol industry, Brown-Forman has maintained its growth trajectory by launching and sustaining its brands in select markets. The company's strategy focuses on expanding its presence in emerging markets and targeting consumers seeking unique experiences, which positions it well for future growth. Brown-Forman's commitment to responsible building of the company, coupled with its strong brand portfolio and strategic initiatives, has positioned it as a leading spirits and wine producer with significant long-term growth potential.



In conclusion, Brown-Forman Corporation (BF-B) presents an attractive investment opportunity in the alcohol industry, with a strong brand portfolio, growth potential, and attractive financial performance. The company's strategic initiatives, commitment to innovation, and positive analyst outlook make it an appealing choice for investors seeking exposure to the alcohol industry. As the company continues to grow and expand its global presence, it is well-positioned to capitalize on the long-term trends in the spirits and wine market.
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