Brown-Forman (BF.B:NYS) Fundamental Valuation Report

Fundamental Valuation Report


Consumer Defensive:Beverages-Wineries & Distilleries

This Report was generated using the valuation tools available on For a free 30 day trial click here.

Close Price/Date
$54.88 (USD) 17/06/2019

Weighted Valuation
$52.55 (USD)

Overall Rating
Fairly valued to slightly Overvalued by 4.3%

Valuation Models Analyst Consensus: $56.00 (USD)
(in order of importance) Adjusted Book Value: $49.47 (USD)
Multiples: $48.35 (USD)
Valuation Methods This company is:
Cash Flow: Overvalued on a Cash Flow Valuation
Comparable Company: Overvalued on a Comparable Valuation
Asset: Overvalued on an Asset Valuation

Company Overview (BF.B:NYS USD)

Price 0.00
Range 0.00 – 0.00
52 week 0.00 – 0.00
Open 0.00
Vol / Avg. 0/0
Mkt cap 0
P/E 0.00
Div/yield 0.00/0.00
EPS 0.00
Shares 0
Beta 0.00

Company Description

Brown-Forman Corp produces and sells alcoholic beverages, including the Jack Daniel’s family of products, which contribute around 60% of the firm’s annual depletion volume. Jack Daniel’s Tennessee Whiskey is the fourth- largest spirits brand in the world and has the dominant market share of the domestic bourbon and Tennessee whiskey category. Brown-Forman also sells several other spirits brands, including Woodford Reserve, Old Forester, Finlandia, el Jimador, and Herradura, as well as Sonoma-Cutrer wine, and generates nearly half of its revenue in the United States.

Valuation Details

 We have up to 6 valuation points for each company. Details are at the bottom of the report.

Discounted Cash Flow and Sensitivity Analysis for BF.B:NYS

Using a discounted cash flow model we generated an intrinsic value of $34.20 (USD) for BF.B:NYS

Sensitivity Analysis

(showing how changes in the input variables impact the DCF calculation)

BF.B:NYS Current Values Valuation If Dropped * Valuation If Raised *
Calculated Value: $34.20 1% 5% 1% 5%
WACC (or Ke) 7.17 $44.17 $27.57
Terminal Growth Rate 2.20 $28.12 $43.34
Tax Rate 0.20 $37.03 $31.37
Cash Flow 1,535,657,200 $31.80 $36.61
Capital Expenditures -117,200,000 $34.03 $34.37
Long Term Debt 2,241,000,000 $34.43 $33.97

* Changes are absolute: ex WACC from 8% to 7%

Comparables Model

Using similar companies and price based ratios we generated a valuation of $30.20 (USD) for BF.B:NYS. We also generated a valuation of $81.61 (USD) using other metrics and comparables.
The comparable companies were and Constellation Brands (STZ:NYS).

Company BF.B:NYS End Date Value
Earnings/Share $1.73 (USD)
Book Value/Share $3.13 (USD)
Sales/Share $6.85 (USD)
Cash Flow/Share $1.30 (USD)
EBITDA/Share $2.49 (USD)
Price Based on Comps Adjustment Factor (%)
$17.37 (USD) 22.2
$8.43 (USD) 0.0
$32.60 (USD) 90.9
$17.23 (USD) 47.4
$24.38 (USD) 36.0
BF.B:NYS Ratios Used Average Values STZ:NYS
30.66 PE Ratio 10.04 10.04
15.98 PB Ratio 2.69 2.69
7.30 PS Ratio 4.76 4.76
38.55 PCF Ratio 17.19 17.19
24.88 EV to EBITDA 9.78 9.78


Using a multiples approach we generated a valuation of  $48.35 (USD) for BF.B:NYS

Company BF.B:NYS End Date Value
Earnings/Share $1.73 (USD)
Book Value/Share $3.13 (USD)
Sales/Share $6.85 (USD)
Cash Flow/Share $1.30 (USD)
EBITDA/Share $2.49 (USD)
Price Based on Comps Adjustment Factor
$52.80 (USD) 0
$45.22 (USD) 0
$46.08 (USD) 0
$45.89 (USD) 0
$51.75 (USD) 0
Ratios Ratio Average
PE Ratio 30.52
PB Ratio 14.46
PS Ratio 6.73
PCF Ratio 35.39
EV to EBITDA 20.76

Adjusted Book Value versus Historical Price to Book

The average the Price to Book ratio for  BF.B:NYS for the last 10 years was  14.33

We ran the Adjusted Book Value for  BF.B:NYS and generated a book value of  $3.45 (USD)
By multiplying these we get an adjusted valuation of  $49.47 (USD)

Analyst Data

In the Stockcalc database there are 4 analysts that provide a valuation for BF.B:NYS. The 4 analysts have a concensus valuation for BF.B:NYS for 2020 of $56.00 (USD).

BF.B:NYS Brown-Forman

Analyst Recommendation
Buy Hold Sell Rating
(of 5)
Guidance As Of
1 2 1 2.8000 Hold 2019-6-17

Current Price: 54.88 USD

Analyst Consensus
USD Millions 2020 2021 2022
Mean EPS 1.81 1.96 2.21
# EPS Analysts 4 3 1
Mean Revenue 3,557.40 3,727.70 3,964.20
# Revenue Analysts 4 3 1
Mean Target Price 56.00
Mean Cash Flow 1.94 2.08
Mean EBITDA 1,229.30 1,325.30 1,502.60
Mean Net Income 864.40 941.30 1,052.00
Mean Debt Outstanding 1,618.00 1,276.00
Mean Tax Rate 20.50 20.50
Mean Growth Rate 10.73
Mean Capital Expenditure 119.40 127.50 118.90

Explanation of Valuation Models

We have up to 6 valuation points for each company in the database.
The Discounted Cash Flow (DCF) valuation is a cash flow model where cash flow projections are discounted back to the present to calculate value per share. DCF is a common valuation technique especially for companies undergoing irregular cash flows such as resource companies (mining, forestry, oil and gas) going though price cycles or smaller companies about to generate cash flow (junior exploration companies, junior pharma, technology firms…).
The Price Comparables valuation is the result of valuing the company we are looking at on the basis of ratios from selected comparable companies: Price to Earnings, Price to Book, Price to Sales, Price to Cash Flow, Enterprise Value (EV) to EBITDA. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
We have included the Other Comparables as a way to value companies that cannot be valued using Earnings based ratios. This technique is very useful for companies still experiencing negative cash flows such as mining exploration firms. We use Cash/Share, Book Value/Share, MarketCap, 1 Year Return, NetPPE as the ratios here. Each of these ratios for the selected comparable companies are averaged and multiplied by the values for the company we are interested in to calculate a value per share for our selected company.
Multiples are similar to Price comparables where we look at current or historic ratios for the company in question to assess what it should be worth today based on those historic ratios. We use the same 5 ratios as in the price comparables and value the company with its historic averages.
With Adjusted Book Value (ABV) we calculate the book value per share for the company based on its balance sheet and multiply that book value per share by its historical price to book ratio to calculate a value per share.
If we have Analyst coverage for the company we use the consensus target price here.

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