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On Thursday, TD Cowen maintained a Hold rating for Brown Forman (NYSE:BFb) shares (NYSE:BF-B) with a steady price target of $38.00. The decision follows the company’s third-quarter results, which exceeded expectations. Despite the positive performance, TD Cowen expressed concerns about the slow recovery in U.S. spirits growth and the looming uncertainty of tariffs that could potentially impact the company’s future performance.
Brown Forman reported its third-quarter earnings, showcasing stronger-than-anticipated results. The company also confirmed its fiscal year 2025 guidance, a move not anticipated by TD Cowen, especially after observing weak holiday consumption trends. Management has forecasted that shipments and depletions are expected to align with the fiscal year 2025, noting that distributor inventories are currently at the lower end of the historical average.
The spirits company’s third-quarter success was tempered by the acknowledgment of challenges in the U.S. market. Brown Forman is facing a slower recovery in the U.S. spirits sector, which could hinder its growth. Additionally, the potential for tariff headwinds adds another layer of uncertainty to the company’s outlook.
TD Cowen’s analyst highlighted these concerns, stating that while the third-quarter results were impressive, the sluggish U.S. spirits market and the possibility of tariff implications could pose significant risks. Despite these factors, the firm has chosen to maintain its Hold rating and $38 price target for Brown Forman stock.
Investors and market watchers will likely continue to monitor Brown Forman’s performance closely, especially in light of the challenges posed by the U.S. market and international trade developments. The company’s ability to navigate these issues will be crucial in determining its success in the coming fiscal year.
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