Brown Forman Stock Analysis, Valuation (NYSE:BF.A)

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$49.78 $0.87 (1.72%) BF.A stock closing price Sep 17, 2018 (Closing)

Take a look at Amigobulls Brown Forman stock analysis video. This video puts forward our latest analysis highlighting the pros and cons for BF.A stock.

Note: Amigobulls stock rating is our opinion based on the historical performance of the company's fundamentals. It is not indicative of the future performance of the stock.

Brown-Forman Corporation Stock Rating 3.4/5

Amigobulls BF.A stock analysis relies on business fundamentals such as Brown Forman revenue growth, profits and return on equity measures from the latest quarter 2019 Q1 earnings. We also use relative valuation metrics like PE ratio and price to sales ratio for Brown Forman valuation analysis. Brown Forman stock rating is our opinion about the business fundamentals of the company.

Should you buy BF.A stock?

  • The TTM operating margin was good at 26.08 for Brown Forman.
  • Net margins stood at a healthy 18% (average) for Brown Forman in the Trailing Twelve Months.
  • Brown Forman's return on invested capital of 19.8 is good.
  • The LTM ROE of 51.6 for Brown Forman is attractive.

Should you sell BF.A stock?

  • Brown Forman sales declined by -17.4% year on year in 2018-04.
  • Revenue growth of 1 has been weak over the last 5 years.
  • With a debt/equity ratio of 1.94, Brown Forman is highly leveraged in comparison to Consumer Staples peers.
  • The company has an operating cash flow which is 0.6364 times the net income. This is not a healthy sign.
  • The BF.A stock currently trades at a PE of 33.7, which is expensive, compared to the sector average of 21.4.
  • The company is trading at a price to sales multiple of 6.7, which is higher in comparison to the Consumer Staples sector average of 1.6, making BF.A stock expensive.

Comments on this video and Brown Forman stock

Investors can use Amigobulls Brown Forman stock analysis as a tool to arrive at accurate conclusions regarding financial health of the company and its valuation. Fundamental analysis of a company is the most often used approach to find the intrinsic value of a stock.

While doing a study of the company financials, Brown Forman revenue growth and profit or net income are two main metrics which help in identifying whether BF.A stock is overvalued or undervalued. Technical analysis comes in handy to check whether the market sentiment is in line with the fundamental picture of the company.