Evercore ISI Upgrades Brown Forman (BF-B) to In Line, 'valuation lofty, but more reasonable now'

Evercore ISI analyst Robert Ottenstein upgraded Brown Forman (NYSE: BF-B) from Underperform to In Line with a price target of $68.00 (from $60.00).

The analyst comments "Upgrade to In Line – valuation lofty, but more reasonable now. Brown-Forman has tremendous brand assets, a demonstrated record of patient and effective innovation, and a long growth runway. It deserves to trade at a substantial premium to the Staples sector. Current valuation of 29.5x P/E and 22.0x EV/EBITDA on C2024 declined from nearly ~40x NTM P/E over 2020-21. Despite recent declines, valuation is still demanding, and we prefer Diageo, which is trading at ~18.0x C2024 P/E, for exposure to U.S. spirits and emerging markets. Whiskey accounts for >70% of BF’s volumes, making the firm highly susceptible to potential changes in consumer tastes, but recent diversification into high-end gin and rum with Gin Mare and Diplomático, as well as continued investment in tequila and RTDs, makes us more comfortable with the firm’s portfolio."

For an analyst ratings summary and ratings history on Brown Forman click here. For more ratings news on Brown Forman click here.

Shares of Brown Forman closed at $64.77 yesterday.

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