Bubble or no bubble, this is the best stock for AI exposure: analyst
Investing.com - JPMorgan has assumed coverage on Brown Forman (NYSE:BF-B) with an Underweight rating and a $29.00 price target.
The investment bank cited ongoing lack of visibility to stabilization or recovery within the spirits industry as the primary reason for its cautious stance on the stock.
JPMorgan noted that Brown Forman is currently trading at 16.3x next-twelve-months price-to-earnings ratio, which is approximately 45% below its 10-year average and represents a 15% premium to peers versus its historical 10-year average premium of 39%.
The firm acknowledged some potential near-term positives for Brown Forman, including the Jack Daniel’s Blackberry innovation, stronger consumer response to the "That’s What Makes Jack, Jack" campaign, and distributor changes that could result in more focus on Brown Forman’s brands.
JPMorgan also recognized the company’s long-term growth runway in international markets, potential margin expansion, and possible increased cash returns to shareholders, though it suggested investors would appreciate more clarity from management on these initiatives.
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