Value
4.3/10data confidence 67%| Component | Sub-score |
|---|---|
| P/E | 7.0 |
| P/S | 8.1 |
| EV/EBITDA | 4.2 |
| PEG | 2.9 |
- ▸PEG: 4.38
BF-A · Why this verdict
Why Brown Forman (BF-A) is rated SELL
Updated
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
Show full disclosure ▾Hide full disclosure ▴
About TrendMatrix. TrendMatrix is a publisher of general securities research and market commentary. We publish on a regular schedule. All content is the same for every subscriber in a tier — we do not provide personalized investment advice and we do not take into account any individual subscriber's financial situation, investment objectives, risk tolerance, tax situation, or holdings.
Not investment advice. TrendMatrix is not a registered investment adviser. Our content is for informational and educational purposes only. Consult your own licensed investment adviser, broker, or tax professional before making any investment decision.
Conflicts and positions. The TrendMatrix editorial team frequently holds personal long-term positions in securities discussed. We disclose positions held at the time of publication on each piece. We maintain a trading-window policy: we do not initiate or close positions in the same direction as a TrendMatrix publication within 24 hours before or 72 hours after publication.
No paid promotion. TrendMatrix does not accept payment from any issuer, broker, or third party in exchange for coverage of any security. Our sole compensation is subscription revenue.
No fiduciary duty. No fiduciary, advisory, or agency relationship is created between you and TrendMatrix by reading our content or subscribing to our service.
Performance. Past performance is not indicative of future results. Performance figures reflect the published model only and do not reflect any individual subscriber's actual results.
VerdictSELL
Overall score4.7/10
ConfidenceMEDIUM
MacroNEUTRAL
TrendMatrix Research · core thesis
Engine thesis — one sentence
A high-quality consumer defensive franchise with strong margins and a near-perfect Piotroski financial-health score, but the current price has closed virtually all available upside with only 0.4% to the resistance target and an unfavorable risk/reward of 0.08; supply chain concentration and weak earnings growth add meaningful downside risk for any new position.
Falsifiable statement — pillar-level invalidators below. Engine-derived; not personalized advice.
Thesis pillars
| Pillar | Expectation | Trend |
|---|---|---|
The business earns 18% operating margins with a Piotroski F-Score of 8 out of 9, reflecting strong profitability, low leverage relative to its current ratio of nearly 10, and consistent cash generation — attributes that hold up in economic downturns and justify the company trading at a premium to lower-quality peers. Quality breakdown | Piotroski F-Score remains at or above 8 and operating margins stay above 15% over the next four reporting periods. | →Stable |
| CounterStrong reported margins and financial-health scores can persist even as the underlying growth engine stalls; if revenue growth remains flat, quality scores are a lagging indicator that will eventually compress. | ||
With only 0.4% separating the current price from the resistance target and a risk/reward of 0.08, there is almost no margin for error in a new position — downside risk is roughly 13 times the available upside, making the current entry point unattractive on any objective asymmetry basis. Price targets | Price pulls back more than 10% below $27.15 to below $24.44, resetting meaningful upside cushion before the setup becomes actionable. | →Stable |
| CounterPositive momentum — the stock is above its 200-day moving average — could extend the current level or push price modestly higher, and a new analyst target raise could re-open upside from here. | ||
A single glass producer supplies a critical input for the business, creating a high-severity supply chain vulnerability; any disruption to that sole supplier — capacity limits, pricing leverage, or logistics failure — flows directly through to production costs and availability with no ready alternative. Risk breakdown | Company discloses a second qualified glass supplier representing at least 20% of supply volume in the next annual filing, materially reducing single-source dependency. | →Stable |
| CounterSole-source supplier relationships in established consumer goods manufacturing often persist for decades without disruption; the risk is real but the probability of an actual supply failure in any 12-month window may be low. | ||
A PEG ratio of 4.36 signals the current valuation assigns a steep premium to growth that has not materialized — earnings growth is effectively flat and revenue growth is soft — leaving the multiple exposed if any re-rating toward growth peers occurs. Valuation breakdown | Annual revenue growth accelerates above 10% for 2 consecutive fiscal years, providing fundamental support for the current multiple. | →Stable |
| CounterConsumer defensive companies with strong moat scores and consistent free cash flow have historically sustained elevated multiples even through extended periods of low organic growth, limiting the likelihood of a sharp valuation de-rating. | ||
The business earns 18% operating margins with a Piotroski F-Score of 8 out of 9, reflecting strong profitability, low leverage relative to its current ratio of nearly 10, and consistent cash generation — attributes that hold up in economic downturns and justify the company trading at a premium to lower-quality peers.
→StableQuality breakdown
- Expectation
- Piotroski F-Score remains at or above 8 and operating margins stay above 15% over the next four reporting periods.
CounterStrong reported margins and financial-health scores can persist even as the underlying growth engine stalls; if revenue growth remains flat, quality scores are a lagging indicator that will eventually compress.
With only 0.4% separating the current price from the resistance target and a risk/reward of 0.08, there is almost no margin for error in a new position — downside risk is roughly 13 times the available upside, making the current entry point unattractive on any objective asymmetry basis.
→StablePrice targets
- Expectation
- Price pulls back more than 10% below $27.15 to below $24.44, resetting meaningful upside cushion before the setup becomes actionable.
CounterPositive momentum — the stock is above its 200-day moving average — could extend the current level or push price modestly higher, and a new analyst target raise could re-open upside from here.
A single glass producer supplies a critical input for the business, creating a high-severity supply chain vulnerability; any disruption to that sole supplier — capacity limits, pricing leverage, or logistics failure — flows directly through to production costs and availability with no ready alternative.
→StableRisk breakdown
- Expectation
- Company discloses a second qualified glass supplier representing at least 20% of supply volume in the next annual filing, materially reducing single-source dependency.
CounterSole-source supplier relationships in established consumer goods manufacturing often persist for decades without disruption; the risk is real but the probability of an actual supply failure in any 12-month window may be low.
A PEG ratio of 4.36 signals the current valuation assigns a steep premium to growth that has not materialized — earnings growth is effectively flat and revenue growth is soft — leaving the multiple exposed if any re-rating toward growth peers occurs.
→StableValuation breakdown
- Expectation
- Annual revenue growth accelerates above 10% for 2 consecutive fiscal years, providing fundamental support for the current multiple.
CounterConsumer defensive companies with strong moat scores and consistent free cash flow have historically sustained elevated multiples even through extended periods of low organic growth, limiting the likelihood of a sharp valuation de-rating.
Per-dimension breakdown
Quality
7.8/10data confidence 100%| Component | Sub-score |
|---|---|
| ROE | 5.9 |
| ROA | 5.8 |
| Gross margin | 8.1 |
| Op margin | 9.3 |
| Net margin | 9.1 |
| Current ratio | 9.8 |
| FCF quality | 7.2 |
| Moat | 6.5 |
| Piotroski F | 8.9 |
- ▸Strong margins: 18%
- ▸Strong Piotroski F-Score: 8/9
- ▸High-quality business
Growth
1.5/10data confidence 67%| Component | Sub-score |
|---|---|
| Rev growth | 3.0 |
| EPS growth | 0.0 |
Momentum
6.6/10data confidence 100%| Component | Sub-score |
|---|---|
| RSI | 5.0 |
| MACD | 10.0 |
| OBV | 10.0 |
| MA position | 8.0 |
| Volume | 0.0 |
- ▸Volume accumulation (rising OBV)
- ▸Above 200-MA but MA slope flat
Sentiment
4.6/10data confidence 67%| Component | Sub-score |
|---|---|
| Analyst rating | 5.0 |
| erm sentiment | 4.1 |
Insider
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| materiality | 5.0 |
| holder change | 5.1 |
- ▸No net insider activity — $0 (0.000% of mkt cap)
Peer rank
2.9/10data confidence 80%| Component | Sub-score |
|---|---|
| value rank | 1.7 |
| quality rank | 1.7 |
| growth rank | 3.3 |
Technical
2.6/10data confidence 100%| Component | Sub-score |
|---|---|
| bollinger | 0.5 |
| support resistance | 0.3 |
| 52w position | 7.0 |
Risk (lower is worse)
7.1/10data confidence 100%| Component | Sub-score |
|---|---|
| short interest | 9.1 |
| days to cover | 8.1 |
| volatility | 5.3 |
| max pain risk | 3.0 |
| beta | 10.0 |
| debt equity | 7.1 |
- ▸Above max pain $15
- ▸Concentration risks: 3 MED (10-K Item 1A)
Catalyst
5.0/10data confidence 50%| Component | Sub-score |
|---|---|
| erm | 3.5 |
| dividend safety | 6.5 |
- ▸Dividend: 329.0%
How the verdict was assembled
Engine trigger
Multiple concerning factors. Consider reducing position.
Engine technical detail
verdict_path:
L4:PATH_F_SELLPassed (6)
- MOMENTUM:6.6>=5.5
- INSIDER:OK
- NEWS_EVENTS:NONE_RECENT
- EARNINGS_PROXIMITY:NO_DATE
- SEMI_CYCLE_PEAK:CLEAR
- MATERIALS_CYCLE_PEAK:CLEAR
Failed (0)
none
Warning (2)
- ASYMMETRY:UPSIDE_EXHAUSTED (upside=0.0%)
- 8K_CSUITE_CHANGE:5.02 (officer departure/appointment)
Reward-to-Risk
0.00
Upside
+0.0%
Downside
10.2%
Sizing output
AVOID
SetupBREAKOUT — Golden cross, above all MAs, RSI 67, MACD bullish
EdgeNO_EDGE — No clear edge identified
SuitabilityMODERATE — Balanced profile
Investment implication
The F-path SELL output reflects an overall score of 4.7 below the 5.6 soft trigger — multiple weakening dimensions accumulated rather than a single hard-floor breach. The strongest dimension ( Quality at 7.8) was not enough to lift the adjusted overall above the threshold. Current asymmetry R:R is 0.00 — supplementary context, not the trigger for this path.
The strongest dimensions are Quality at 7.8, Risk (lower is worse) at 7.1, and Momentum at 6.6; the weakest are Growth at 1.5, Technical at 2.6, and Peer rank at 2.9. The V9 engine cleared all gates with 2 warnings, producing an asymmetric reward-to-risk of 0.00 and an engine sizing output of AVOID.
What would invalidate the thesis
Falsifying conditions — when triggered, the corresponding pillar's thesis is invalidated.
- P1The business earns 18% operating margins with a Piotroski F-Score of 8 out of 9, reflecting strong profitability, low leverage relative to its current ratio of nearly 10, and consistent cash generation — attributes that hold up in economic downturns and justify the company trading at a premium to lower-quality peers.
Trip ifPiotroski F-Score falls below 7 for 2 consecutive quarterly reports.
- P2With only 0.4% separating the current price from the resistance target and a risk/reward of 0.08, there is almost no margin for error in a new position — downside risk is roughly 13 times the available upside, making the current entry point unattractive on any objective asymmetry basis.
Trip ifPrice pulls back more than 10% below $27.15 to below $24.44 over the next 2 quarters.
- P3A single glass producer supplies a critical input for the business, creating a high-severity supply chain vulnerability; any disruption to that sole supplier — capacity limits, pricing leverage, or logistics failure — flows directly through to production costs and availability with no ready alternative.
Trip ifCompany discloses 2 or more independent glass suppliers each representing at least 20% of supply in the next annual filing.
- P4A PEG ratio of 4.36 signals the current valuation assigns a steep premium to growth that has not materialized — earnings growth is effectively flat and revenue growth is soft — leaving the multiple exposed if any re-rating toward growth peers occurs.
Trip ifAnnual revenue growth accelerates above 10% for 2 consecutive fiscal years.