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Brown-Forman's Premium Brands Drive Profitability In The Spirits Industry

Welbeck Ash Research profile picture
Welbeck Ash Research


  • Brown-Forman Corporation, a leading American spirits and wine company, operates an extensive portfolio of premium brands such as Jack Daniel's and Woodford Reserve.
  • The company's strong brand equity, product innovation, and global reach allows the business to generate strong returns.
  • We expect growth to continue, although margin improvement looks uncertain given the historical weakness.
  • Relative to peers, BFB looks average based on profitability and growth. Despite this, the company trades at a large premium.

Jack Daniels truck at distillery in Lynchburg, TN, USA

PaulMcKinnon/iStock Editorial via Getty Images

Investment Thesis

Our current investment thesis is:

  • BFB is a well-positioned business due to its wide moat. Its global brands, including Jack Daniel's, as well as its global scale allows the business to generate strong returns.

This article was written by

Welbeck Ash Research profile picture
Our intention is to provide insightful research and new ideas, through deep bottom-up business analysis. We look to tell a story and identify the hallmarks of long-term quality. We are not swayed by the emotions of market sentiment and short-term desires.“Day to day, the stock market is a voting machine; in the long term it’s a weighing machine.”

Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.

Seeking Alpha's Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.

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Comments (4)

thirdcamper profile picture
I agree - great business, ridiculous valuation.
@thirdcamper 40 is definitely a bit ridiculous.
Is the jack and coke for sale yet....
@Valuestocks007 I believe it is, in select markets.
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