What Brown-Forman Needs To Succeed Long-Term

In a report published Monday, Cowen and Co analysts maintained an Outperform rating on Brown-Forman Corp (NYSE: BFB), with the price target of $104. Following the meeting with Director of IR, Jay Koval, BFB continues to be "our top pick" in the alcoholic beverages segment, the analysts said.

Brown-Forman has a "multi-decade view of the business" and this should drive continued strong top-line growth. International growth opportunities and the positive impact of the whiskey "renaissance underway" in the US are expected to drive continued growth in the long term.

In the report Cowen and Co noted, "One of the hallmarks of the BFB story is the company's long-term strategic orientation, as they maintain a key focus on being good stewards of the Jack Daniel's brand. This strategy has served the company well, and has resulted in consistently robust top and bottom line growth over the last 10, 15, 25, and 35 year periods (with BFB generally delivering HSD sales growth and LDD EPS growth)."

Brown-Forman's long-term vision is reflected in its incredible capital investment that is underway. It is impressive that the company also has plans to repurchase $1 billion worth of stock in FY16. The EPS estimate for FY16 has been raised from $3.38 to $3.47.

Brown-Forman is feeling the pressure of a strengthening USD, just as its competitors are. Despite the currency headwinds, the company is likely to deliver "positive reported EPS growth" in FY15 and FY16, while most of its multi-national peers may not achieve this, reflecting strength in the company's "underlying earnings," the analysts added.