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

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$53.1 $0.79 (1.51%) BF.A stock closing price Apr 23, 2018 (Closing)
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Brown Forman
Updated on : Apr 23, 2018
previous close
BF.A 53.1 (0%)
S&P 500 2670.3 (0%)
Closing Price On: Apr 23, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Beverages-Alcoholic
Sector :
Consumer Staples
5 Quarter Revenue
Revenue Growth
2018-Q3
$million
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
2.2%
Operating Profit
Operating Margin:
26.7%
Sector Average:
11.9%
5 Quarter Net Profit
Net Margins
2018-Q3
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
2.1B
Debt/Equity Ratio:
 1.75
Compared to the industry
Cash Flow
Operating cash flow:
$348M
Net Income:
$190M
Dividend Yield
BF.A dividend yield:
1.15%
PROS      CONS
Operating Margins
Net Margins
Cash Flow
ROIC
ROE
FCF Margin
Long Term Growth
High Debt Burden
PE Valuation
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
BF.A PS :
6.2
Industry PS :
1.6
Sector:   Consumer Staples.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
21%
Return on Equity:
55%
Free Cash Flow Margin:
27%
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Brown Forman Stock Analysis

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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 3.2/5

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 2018 Q3 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?

  • Brown Forman's average operating margin of 26.7% was exceptional.
  • LTM Net margins were good at 18.1% for Brown Forman.
  • The company has an operating cash flow which is 1.8 times the net income.
  • Brown Forman generates a high return on invested capital of 21%.
  • The LTM ROE of 55% for Brown Forman is attractive.
  • The company has a healthy free cash flow margin of 27%.

Should you sell BF.A stock?

  • Revenue growth of 2.2% has been weak over the last 5 years.
  • Brown Forman is debt laden and has a high debt/equity ratio of  1.75.
  • Trading at a PE ratio of 33, BF.A stock is overvalued in comparison to industry average multiple of 22.8.
  • The company is trading at a price to sales multiple of 6.2, which is overvalued in comparison to the Beverages-Alcoholic industry average multiple of 1.6.

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.