Brown-Forman Corporation (BF-B): A Bull Case Theory
A close-up of bottles of whisky and other alcoholic beverages from a winery.
Brown-Forman, the dominant force in American whiskey and a top-five global player in premium spirits, finds itself at a unique inflection point. Despite doubling its operating profit since 2013, the stock now trades at decade-old levels, presenting a compelling value disconnect.
Nearly 90% of its revenue stems from American whiskey and tequila, two of the fastest-growing spirits categories over the last decade, highlighting the strength of its portfolio. At the heart of Brown-Forman lies the iconic Jack Daniel's brand, a global household name with unmatched brand equity. But the company's depth goes beyond Jack, with heritage-rich labels like Old Forester and Casa Herradura, both founded in 1870, anchoring its position in bourbon and tequila.
Brown-Forman also owns leading brands in four premium categories: Woodford Reserve (super-premium whiskey), Herradura (super-premium tequila), Gin Mare (ultra-premium gin), and Diplomatico (ultra-premium rum), giving it broad exposure to high-growth niches.
Recent macro headwinds have hit the stock hard—Brown-Forman is down 60% from its highs amid inflationary pressure, rising rates, and shifting consumer sentiment. Interest has drifted toward wellness trends, including GLP-1s, cannabis, and Gen Z preferences, while the new U.S. administration's 'Make America Healthy Again' campaign poses policy risks for alcohol.
Yet, potential tailwinds could reenergize the narrative. A reversal of U.S. tariffs on bourbon could boost domestic competitiveness, and collapsing agave prices in 2025 offer a margin expansion opportunity in tequila. Though short-term demand data is soft, Brown-Forman's timeless brands and deep global heritage suggest long-term strength beneath the surface volatility.
Previously, we covered a on Brown-Forman (BF-B) by Olver| MMMT that emphasized its dividend consistency, defensive margins, and relative tariff resilience. Moran Capital's thesis strengthens the case by framing Brown-Forman as a structurally undervalued global spirits powerhouse with deep category exposure and brand equity across whiskey, tequila, gin, and rum, arguing that macro-driven weakness has obscured a premium brand portfolio poised to benefit from cyclical recovery and commodity tailwinds.
Brown-Forman Corporation (BF-B) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 37 hedge fund portfolios held BF-B at the end of the first quarter, which was 38 in the previous quarter. While we acknowledge the risk and potential of BF-B as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.
READ NEXT: 8 Best Wide Moat Stocks to Buy Now and 30 Most Important AI Stocks According to BlackRock.
Disclosure: None. This article was originally published at Insider Monkey.
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