Brown-Forman Beats JPM Estimates, Valuations Stays Rich

JP Morgan has published a research report on Brown-Forman Corporation (NYSE: BF.B) after the company reported 2Q earnings results that beat estimates.

In the report, JP Morgan writes "BFB reported FQ2 EPS of $1.05 vs. our $1.03 estimate and $1.00 consensus. We were not very enthusiastic about the quality of the quarter as upside was driven by favorable FX (~$0.05 EPS), with slightly better than expected GM. Sales of +1% were below our +3% forecast with underlying sales of 2% (JPMe +4%). The company also hosted an analyst conference in the afternoon, where management talked about doubling OI over the next 10 years through share gains in the US, growth overseas and potentially expanding their presence in faster growing categories like vodka and tequila. We think the intl growth story remains solid, but remain skeptical on share gains in the US with the current portfolio."

JP Morgan maintains its Neutral rating and has raised the price target from $62 to $74.

Brown-Forman closed Friday at $68.87.