Brown-Forman Sales Drop 2% as Morgan Stanley Cuts Target to $27
Morgan Stanley cut Brown-Forman’s price target to $27 from $29 and kept an Underweight rating, citing American whiskey oversupply, structural headwinds and rising costs. In fiscal Q2, reported net sales fell 2% over nine months with organic growth flat as emerging markets rose 15% and Travel Retail sales gained 7%.
1. Price Target Reduction and Rating
Morgan Stanley lowered Brown-Forman’s price target to $27 from $29 and maintained an Underweight rating, citing American whiskey oversupply, structural headwinds and rising production and distribution costs that could pressure margins and limit topline growth.
2. Fiscal Q2 Sales Performance
During fiscal Q2, Brown-Forman reported a 2% decline in net sales over the first nine months, with organic growth flat; growth in emerging international markets rose 15% while Travel Retail sales increased 7%, driven by strong results in Mexico and Brazil.
3. New Product Launches and Portfolio Changes
The company launched Jack Daniel’s Tennessee Blackberry, ranking as the second-largest new spirits offering by value in the US and Europe, debuted New Mix ready-to-drink cocktails in the US, and ended its partnership with Pabst Brew & Company for Jack Daniel’s Country Cocktails to centralize its flavored malt beverage strategy.