Exane BNP Paribas Starts Coverage on Brown-Forman with Updated Price Target
Brown-Forman Corp has been making headlines recently with some new developments in the world of finance. Exane BNP Paribas started covering the company and gave it an Outperform rating, along with setting a price target of $48. On the other hand, TD Cowen downgraded Brown-Forman from Buy to Hold, with a revised price target of $48. Barclays, however, upgraded Brown-Forman from Equal Weight to Overweight and set a new price target of $53.
In terms of financial performance, Brown-Forman Corp reported a 3% year-on-year growth in sales for the first quarter of FY24, reaching $1.04 billion. However, this fell short of the analyst consensus of $1.05 billion. The company’s earnings per share (EPS) also missed expectations at $0.48, lower than the anticipated $0.53.
Despite these figures, there were some positive aspects to note. The gross margin expanded by 100 points to 62.7%, although the operating margin did contract by 250 points to 31.5%. Operating income for the quarter dropped by 4% to $327 million. As of July 31, 2023, Brown-Forman had $426 million in cash and equivalents, with operating activities generating $38 million in cash.
In more interesting news, a trademark dispute between Brown-Forman Corp’s Jack Daniel’s and a dog accessory company was brought before the U.S. Supreme Court. The case involves a parody chew toy that resembles Jack Daniel’s black-label whiskey bottle, with implications on trademark rights versus creative expression protections. The court heard arguments from both sides, with Jack Daniel’s Properties Inc contesting VIP Products LLC’s claim that their toy is protected by the First Amendment.
This legal battle has caught the attention of industry groups advocating for corporate interests. It’s definitely something to keep an eye on as it unfolds. Additionally, Wedbush analyst Gerald Pascarelli recently initiated coverage on Brown-Forman with a Neutral rating and a price target of $70. With all these moving parts, it’s clear that Brown-Forman is facing both challenges and opportunities in the market.
