) reached a new 52-week high of $96.02 yesterday and closed the
trading session at $95.97. Apart from strong fourth-quarter fiscal
2014 results and an upbeat guidance for fiscal 2015, the company
has been performing well on the back of brand building and
inorganic growth strategies. Notably, the stock price of this
alcoholic beverage company rose approximately 28.6% year-to-date.
The average volume of shares traded over the last 3 months was
approximately 436K. Moreover, the company currently trades at a
forward P/E of 28.7x, higher than the industry average of 19.6x.
The premium valuation is justified based on its long-term estimated
earnings per share (EPS) growth rate of 9.4%.
Investors are optimistic about this Zacks Rank #3 (Hold) stock
after it posted fourth quarter earnings per share of 62 cents on
Jun 4, which handily surpassed the Zacks Consensus Estimate of 59
cents and rose 17% year over year. The strong bottom-line results
were primarily attributable to solid top-line growth, prudent cost
management and lower effective tax rate.
Brown-Forman reported net sales of $893 million, marking a rise of
3% from the prior-year quarter. After deducting excise taxes, sales
came in at $689 million, up 4.4% from the prior-year figure of $660
million. The rise was primarily driven by strong demand for whiskey
across the company's operating regions along with its geographical
expansion initiatives. The Zacks Consensus Estimate for the quarter
was $703 million.
Further, bolstered by the better-than-expected fourth-quarter
results, Brown-Forman expects the growth story to continue in
fiscal 2015 driven by solid worldwide demand for American whiskey.
Therefore, the company anticipates the underlying and reported
sales will grow in the range of 6% to 8% in fiscal 2015.
Moreover, operating income is expected to increase in the band of
9% to 11% on an underlying as well as reported basis. Based on the
above expectations, the company projected earnings to be in the
band of $3.25 to $3.45 per share for fiscal 2015.
We expect the company's growth momentum to continue, given its
sustained focus on pricing, product innovation and penetration into
the emerging markets, which will help in boosting its operational
performance and strengthening its position. Moreover, we consider
Brown-Forman's constant focus on developing the premium Jack
Daniel's brand through innovation and changes in packaging to have
Apart from Brown-Forman,
Citi Tends Inc.
Constellation Brands Inc.
Spectrum Brands Holdings Inc.
) achieved new 52-week highs of $21.94, $85.99 and $82.65
respectively, on Jun 18, 2014.
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