Jack Daniel's maker leans on innovation as spirits demand remains soft
BF.B•Brokers point to innovation and soft spirits demand
** Berenberg ("hold", PT: $33.40) says innovation and ready-to-drink products continue to support growth, but higher-cost whiskey inventory and input inflation are likely to pressure margins through the rest of the year.
** Roth Capital Partners ("buy", PT: $35) says investors are underestimating the growth potential of innovations such as New Mix and Jack Daniel's Blackberry, while improving category trends and better cost control support earnings.
** J.P. Morgan ("underweight", PT: $25) says the company's better-than-feared quarter was helped by innovation, emerging-market strength and temporary margin benefits, but does not alter its view that weak developed-market demand and rising costs will continue to weigh on results.
Brown-Forman misses sales estimates but reaffirms targets
** Jack Daniel's maker Brown-Forman BFb.N missed Q1 sales estimates on Wednesday, hurt by weak demand for spirits as inflation-weary consumers curtail discretionary spending.
** However, the company narrowly beat profit expectations and reaffirmed annual targets, betting on its ready-to-drink formats and flavored whiskeys.
** Median PT of 18 brokerages covering the stock is $28.
