Ricardo Pillai
3 min read
In This Article:
We came across a bullish thesis on Brown-Forman Corporation (BF-B) on Moram Capital’s Substack. In this article, we will summarize the bulls’ thesis on BF-B. Brown-Forman Corporation (BF-B)'s share was trading at $27.77 as of 10th June. BF-B’s trailing and forward P/E were 15.03 and 14.51 respectively according to Yahoo Finance
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 bullish thesis 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.
