$BFb Q3 2022 Earnings Report
$BFb Long
Brown Forman is a leading whiskey and tequila producer company that now finds itself at 52-week highs and approaching its record high set back in late 2020. Some of the drinks this company makes include Jack Daniel’s. This company has an established record of topping earnings estimates, especially when looking at the previous two reports. The company holds an average surprise for the past two-quarters of 20%. For Brown-Forman B, estimates have been trending higher recently, one reason being due to its earnings surprise history. BF has also been underearning recently due to problems from the pandemic, tariffs, and disruptions with the tequila supply chain which I believe to have been fixed by now. One main reason why most of the big companies have been having trouble beating the estimates lately has been due to inflation, however, this will not be the case for BF. As said by the CEO, “in the premium alcohol category, we are not seeing any impact on discretionary spending. From what we have seen so far, inflation hasn’t really impacted the premium end alcohol and beverage segments and continues to experience high growth rates.” Another thing that I believe has had a positive impact on their revenue is the summer season. As people are going on holidays and having days off, they spend the majority of that time partying and drinking. This year will especially be more valuable since last year due to Covid, people weren’t able to do much so they are compensating for it this year. In the same way, many airlines are now breaking all types of records. Looking at what the company has planned for the future, it is looking pretty good and is something investors will definitely like. Brown Forman recently announced it will invest over £30m in The GlenDronach distillery, enabling it to significantly increase production to meet global demand which has tripled since 2016. This is the second phase of investment by BF in the historic distillery following a major renovation of The GlenDronach Visitors’ Center in 2020, which created an enhanced visitor experience with a new tasting room, whisky bar, lounge, and retail space. Market Cap:35,221,712,073 P/E Ratio:42.36 Initial reaction:Long Researched reaction:Long CEO: Time:Before open Estimate:+4%