BF.B changes
Pick any two versions below to diff them.
- Price
- $28.77 → $30.10(+4.6%)
- Discount category
- Below intrinsic value → Close to intrinsic value
- Next earnings
- Dec 2, 2026 → Dec 3, 2026
- Next earnings is estimate
- Yes → No
- Thesis
- The market prices Brown-Forman at a discount because it fears that people drink less spirits for a long time, not only for a few years. Organic net sales were flat in fiscal 2026 and fell 1% in Q1 of fiscal 2027, and the company expects organic operating income to fall 3% to 5% in fiscal 2027. Jack Daniel's Tennessee Whiskey sales fell in the US and in Europe, and tequila sales fell 13% organic in Q1. Tariffs add pressure: in March 2025, several Canadian provinces removed all American alcohol, including Jack Daniel's, from store shelves. Two events in 2026 added uncertainty. On April 28, talks about a combination with Pernod Ricard ended without a deal. On July 13, the CEO, Lawson Whiting, said that he will retire, and the board is still searching for a successor. For the gap to close, four things must be true. Organic net sales must stop falling and return to growth in fiscal 2028. Jack Daniel's Tennessee Whiskey must stop losing volume in the US and in developed international markets. New products, such as Tennessee Blackberry and New Mix, must keep growing. The new CEO must keep costs under control and keep the dividend growing. The next checks are the Q2 fiscal 2027 removed: report, expected in early added: report on December added: 3, 2026, the appointment of the new CEO, and the fiscal 2027 results and fiscal 2028 outlook in June 2027. Because the change in drinking habits is slow, the gap can close only over several years, if it closes.
- Checkpoints
- Dec removed: 2, 2026 (estimate): added: 3, 2026: Q2 fiscal 2027 results: organic sales trend. Pending. Watch: Organic net sales near flat with the fiscal 2027 outlook kept passes; a larger organic decline or a cut to the outlook fails. Q1 2027 (estimate): New CEO appointed. Pending. Watch: A new CEO in place with a clear plan for growth and costs passes; a long search with no successor fails. Jun 2027 (estimate): Fiscal 2027 results and fiscal 2028 outlook. Pending. Watch: An outlook for organic net sales growth in fiscal 2028 passes; another year of flat or lower organic sales fails.