Needham analyst Gerald Pascarelli has reiterated their neutral stance on BF.B stock, giving a Hold rating today.
Gerald Pascarelli has given his Hold rating due to a combination of factors affecting Brown-Forman B. The company has shown resilience by exceeding expectations for the second quarter in a row and maintaining its guidance, which is notable given the current challenges in the distilled spirits and whiskey markets. Distributor inventory levels have increased, contributing to a 6% organic growth, and this trend is expected to continue benefiting the company in the upcoming quarter, provided that there is no significant decline in depletions.
Despite these positive aspects, there are ongoing concerns that justify a Hold rating. The company is facing broad category pressures and weak consumer takeaway trends, which could impact performance. Additionally, the looming threat of EU tariffs on American whiskey, potentially reinstating at a 50% rate if no concessions are made by March 31, 2025, adds to the uncertainty. These factors suggest that while the company is performing well under current conditions, there are significant risks that could affect its future performance.
According to TipRanks, Pascarelli is an analyst with an average return of -3.8% and a 40.91% success rate. Pascarelli covers the Consumer Defensive sector, focusing on stocks such as Constellation Brands, Celsius Holdings, and Brown-Forman B.
In another report released today, Truist Financial also maintained a Hold rating on the stock with a $40.00 price target.
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