US: Brown-Forman's earnings to accelerate as US recovers - analyst
Brown-Forman's earnings are expected to be helped by the US recovery
Brown-Forman has scope to deliver earnings growth ahead of forecasts as momentum returns to the US economy, according to an analyst.
The US-based spirits and wines firm announced a 19% rise in Q1 operating profits yesterday (29 August) as its flagship brand Jack Daniel's grew sales by 15%. The group also confirmed its full-year outlook of high single-digit growth in underlying sales and operating profits.
Analysts Nomura said in a note today that the group's growth looks "robust".
In June, Nomura forecast medium-term EBIT growth of about 9% per year for Brown-Forman. "If anything, we see scope for this to accelerate as momentum in the US continues to rebuild," the note said. "We continue to see spirits as a good place to invest in the consumer world."
Nomura repeated its prediction from June that it expects the company to be "more acquisitive" but on a "moderate scale". "In theory, leveraging up to 2.5x net debt/EBITA could justify up to US$3bn of firepower. However, we would expect smaller specific brand or country deals," Nomura said.
While there has been huge focus in the spirits sector on emerging markets in recent years, a new report from Euromonitor International suggests prioritising development in these up-and-coming regions ...
- Brown-Forman's march on premium whisk(e)y -Comment
- Will US consolidation leave craft alcohol exposed?
- Are consumers getting tired of consuming?
- Should Boston Beer Co put up the For Sale sign?
- Where does AB InBev see the future of beer?
- Brown-Forman to buy BenRiach Distillery Co
- AB InBev snaps up Italy's Birra del Borgo
- Smirnoff Ice Electric flavours - NPD
- US craft beer to hit saturation soon - Koch
- Bacardi rolls out new global Martini ad - video
- Global Scotch whisky insights - market forecasts, product innovation and consumer trends
- Consumer and Market Insights: Wine Market in China
- Global non-Scotch whiskies insights - market forecasts, product innovation and consumer trends
- What Next for Beer and Brewers Following the MegaBrew Deal?
- Emerging Drinks Industry Trends