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

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$66.02 $0.42 (0.64%) BF.A stock closing price Feb 22, 2018 (Closing)
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Brown Forman
Updated on : Feb 22, 2018
previous close
BF.A 66 (0%)
S&P 500 2704 (0%)
Closing Price On: Feb 22, 2018
stock rating
RATING: ★★★★★★★★★★ (0/5)
Industry :
Beverages-Alcoholic
Sector :
Consumer Staples
5 Quarter Revenue
Revenue Growth
2018-Q2
$million
%
YOY GROWTH
Compared to the industry
Long Term Growth
5 Year CAGR:
2%
Operating Profit
Operating Margin:
26.6%
Sector Average:
11.2%
5 Quarter Net Profit
Net Margins
2018-Q2
%
LTM Margin
Compared to the industry
Debt/Equity Ratio
Debt:
2.2B
Debt/Equity Ratio:
 1.34
Compared to the industry
Cash Flow
Operating cash flow:
$112M
Net Income:
$239M
Dividend Yield
BF.A dividend yield:
1.09%
PROS      CONS
Operating Margins
Net Margins
ROIC
ROE
FCF Margin
Long Term Growth
High Debt Burden
Cash Flow
PE Valuation
PS Valuation
Rating: ★★★★★★★★★★ (0/5)
Relative Valuation
BF.A PS :
6.3
Industry PS :
1.7
Sector:   Consumer Staples.   *PE adjusted for one time items.
Other Metrics
Return on Invested Capital:
20.6%
Return on Equity:
53.8%
Free Cash Flow Margin:
6.5%
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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 3.1/5

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 Q2 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 26.6% for Brown Forman.
  • Net margins came in at average 18.4% for Brown Forman over the last twelve months.
  • Brown Forman generates a high return on invested capital of 20.6%.
  • Return On Equity (ROE) which is a measure of the company's profitability, looks great for Brown Forman at 53.8%.
  • The company has a good Free Cash Flow (FCF) margin of 6.5%.

Should you sell BF.A stock?

  • Over the last 5 years, the company registered a poor revenue growth of 2%.
  • Brown Forman has a debt/equity ratio of  1.34, which is worse than the average in the Consumer Staples sector.
  • The company has an operating cash flow which is 0.5 times the net income. This is not a healthy sign.
  • BF.A stock is trading at a PE ratio of 34.2, which is worse than the industry average multiple of 23.
  • The company is trading at a price to sales multiple of 6.3, which is overvalued in comparison to the Beverages-Alcoholic industry average multiple of 1.7.

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.