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

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$54.49 $0.97 (1.75%) BF.B stock closing price Apr 20, 2018 (Closing)
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Brown Forman
Updated on : Apr 20, 2018
previous close
BF.B 54.5 (0%)
S&P 500 2670.1 (0%)
Closing Price On: Apr 20, 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.B dividend yield:
1.12%
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.B PS :
6.3
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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Watch the robo advisor video of Brown Forman stock analysis on Amigobulls. Our analyst opinion covering the buy and sell arguments for BF.B stock is shown in the video.

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.B stock analysis takes into account various financial ratios like relative valuation, Brown Forman revenue, growth and return on equity based on latest quarter 2018 Q3 financial statements. We also check Brown Forman dividend performance. We also use relative valuation metrics like PE ratio and price to sales ratio for Brown Forman valuation analysis. Brown Forman stock rating encapsulates our opinion about the company based on the fundamentals.

Should you buy BF.B stock?

  • The TTM operating margin was good at 26.7% for Brown Forman.
  • Net margins came in at average 18.1% for Brown Forman over the last twelve months.
  • The company has an operating cash flow which is 1.8 times the net income. We see this as a positive signal.
  • Brown Forman has an attractive ROIC (Return on Invested Capital) of 21%
  • The LTM ROE of 55% for Brown Forman is attractive.
  • Brown Forman has a healthy FCF (Free Cash Flow) margin of 27%.

Should you sell BF.B stock?

  • Over the last 5 years, the company registered a poor revenue growth of 2.2%.
  • With a debt/equity ratio of  1.75, Brown Forman is highly leveraged in comparison to Consumer Staples peers.
  • The BF.B stock currently trades at a PE of 33.8, which is expensive, compared to the industry average of 22.5.
  • 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 1.6.

Comments on this video and Brown Forman stock

Investors can make use of the Amigobulls Brown Forman stock analysis to ascertain how BF.B stock fares in fundamental analysis investment criteria. Fundamental analysis of a company is the most often used approach to find the intrinsic value of a stock.

Brown Forman revenue growth and profit or net income are the main underlying forces which could detremine the direction of the share price. Along with fundamentals, investors can utilize technical analysis to get a better idea about the price trend of Brown Forman stock.