Brown-Forman Corporation (BF-B) Intrinsic Value & DCF Valuation
Beverages - Wineries & Distilleries · NYSE
Current Price
$26.35
Intrinsic Value
$26.96
+2.2% margin of safety
What Is Brown-Forman Corporation's Intrinsic Value?
As of 2026-10-06, the base-case DCF model estimates the intrinsic value of Brown-Forman Corporation (BF-B) at $26.96 per share, compared with a market price of $26.35, a margin of safety of +2.2%. The base case assumes 2.9% annual free cash flow growth and a 10.0% discount rate.
Across the sensitivity grid the estimate spans $20.9 to $34. Intrinsic value is an estimate built on assumptions, not a fact. A higher discount rate or slower growth pushes the estimate down, while stronger cash flow growth lifts it.
How the DCF works · Recalculate with your own assumptions · What is intrinsic value?
Is Brown-Forman Corporation (BF-B) Undervalued?
At $26.35, BF-B trades about 2.2% below the base-case intrinsic value estimate. That is a real discount, but it stays short of the 30% margin of safety required before calling a stock undervalued.
COMPETITIVE MOAT
↑Iconic Brand Portfolio
Brown-Forman owns globally recognized spirits brands like Jack Daniel's and Woodford Reserve. These brands command premium pricing and strong consumer loyalty.
↑Distribution Network Strength
The company possesses an extensive and established global distribution network. This provides significant barriers to entry for smaller competitors seeking market access.
↑Aging Inventory Value
A substantial portion of Brown-Forman's value lies in its aged whiskey inventory. This aging process creates a natural time-based barrier to replicating its product offerings.
INVESTMENT RISKS
↓Regulatory and Tax Changes
The beverage alcohol industry is subject to significant government regulation and taxation. Changes in these policies can directly impact profitability and market access.
↓Competition from Craft Distillers
The rise of smaller, agile craft distilleries offers consumers diverse and often niche products. This intensifies competition for market share and consumer attention.
↓Macroeconomic Headwinds
Broader economic challenges, such as inflation and consumer spending slowdowns, can reduce discretionary spending on premium spirits.
Base case
BF-B base case valuation
Intrinsic Value
$26.96
Margin of safety
+2.2%
Expected annual return
+0.5%
Base case assumptions: 2.9% annual growth, 10.0% discount rate, 13.28x exit multiple, 5 year projection. Data as of 2026-10-06.
This base case uses default assumptions and is not financial advice. The intrinsic value changes significantly when the growth rate or discount rate changes. Open the calculator to set your own assumptions and see the full sensitivity range.
Customize the BF-B valuation
Adjust the growth rate, discount rate, and exit multiple to see how the intrinsic value and margin of safety for Brown-Forman Corporation respond.
Open DCF Calculator for BF-BCompany Overview
Brown-Forman Corporation, along with its subsidiaries, operates globally within the alcoholic beverage industry. The company is actively involved in the production, distillation, bottling, international trade (importing and exporting), marketing, and sale of a diverse portfolio of alcoholic products. Its extensive offerings encompass a wide variety of spirits, wines, and whiskey products, including specialty whiskey spirits and flavored whiskey liqueurs. The range also features convenient ready-to-drink and ready-to-pour options, pre-mixed cocktails, vodkas, tequilas, champagnes, brandy, bourbons, and other liqueurs. These beverages are primarily marketed under prominent brands such as Jack Daniel's, Reserve, Old Forester, Coopers' Craft, Herradura, el Jimador, New Mix, Korbel Champagnes, Sonoma-Cutrer, Finlandia, GlenDronach, Benriach, Glenglassaugh, Chambord, Slane, and Fords Gin. Beyond beverage sales, Brown-Forman also engages in the sale of used barrels, bulk whiskey, and wine, in addition to offering contract bottling services. The company's distribution model involves reaching retail customers and end consumers through independent distributors or state governments, while directly supplying retailers, wholesalers, and provincial governments. With a history dating back to its founding in 1870, Brown-Forman Corporation is headquartered in Louisville, Kentucky, and conducts substantial operations across the United States, Germany, Australia, the United Kingdom, Mexico, and numerous other international markets.
Financial Metrics — BF-B Stock Valuation Data
Revenue/Share (TTM)
$8.53
FCF/Share (TTM)
$2.02
ROIC (TTM)
13.0%
ROE (TTM)
17.8%
P/FCF
13.3x
EV/EBITDA
13.6x
FCF Yield
7.53%
Debt/Equity
0.62x
On a trailing twelve-month basis, BF-B generates free cash flow per share of $2.02 alongside a ROIC of 13.0%, both central inputs for a DCF valuation. Its P/FCF ratio of 13.3x and FCF yield of 7.53% then frame how BF-B is priced against peers on a cash flow basis.
Frequently Asked Questions
What is the intrinsic value of BF-B?
Brown-Forman Corporation currently generates $2.02 in free cash flow per share. At the current price of $26.35, a DCF model would discount these cash flows at an appropriate WACC and apply a terminal growth rate to arrive at an intrinsic value. The result depends heavily on your growth and discount rate assumptions — a 1% change in WACC typically shifts the fair value estimate by 10-15%. In MiniValuator the model uses a single discount rate that you can edit directly, 10% by default, rather than a computed WACC.
Is BF-B undervalued?
BF-B trades at a P/FCF ratio of 13.3x with a free cash flow yield of 7.53%. A low P/FCF means investors are paying less per dollar of free cash flow; whether that is cheap depends on the company's growth, cyclicality, and capital intensity. However, whether BF-B is truly undervalued requires comparing the DCF intrinsic value to the current market price and evaluating whether the margin of safety is sufficient for your risk tolerance.
How do I value BF-B stock using DCF?
To perform a DCF valuation on Brown-Forman Corporation: (1) Start with the trailing free cash flow per share ($2.02) as the base, (2) project future FCF growth over 5-10 years based on Beverages - Wineries & Distilleries industry trends and company fundamentals, (3) apply a discount rate (WACC) reflecting BF-B's risk profile — with a debt-to-equity of 0.62x, capital structure is an important factor, and (4) add a terminal value for cash flows beyond the projection period.
What is DCF valuation and how does it apply to BF-B?
DCF (Discounted Cash Flow) estimates what a company is worth today based on its future cash generation. For Brown-Forman Corporation, this means projecting how much free cash flow the company will produce over the next 5-10 years, shaped by Beverages - Wineries & Distilleries trends, then discounting those amounts to today's dollars. BF-B's ROIC of 13.0% shows moderate capital returns.
How does WACC affect BF-B stock valuation?
WACC (Weighted Average Cost of Capital) is the discount rate in a DCF model — it reflects the minimum return investors require. For BF-B, with a debt-to-equity ratio of 0.62x, the capital structure directly influences WACC. A 1% increase in WACC typically reduces the intrinsic value by 10-15%. At an EV/EBITDA of 13.6x, the market's implied discount rate can be reverse-engineered for comparison. In MiniValuator you set this discount rate yourself as a single editable number, 10% by default, instead of computing a formal WACC.
Learn More
- See BF-B PE Valuation → — Earnings-based stock valuation using PE ratio analysis
- DCF Methodology — Step-by-step guide to discounted cash flow analysis
- PE Methodology — Guide to PE ratio stock valuation
- WACC — Understanding the discount rate used in DCF
- Margin of Safety — How to evaluate downside protection
- Intrinsic Value — How to evaluate stock fair value
- How to Calculate Intrinsic Value — Complete guide for investors
Related Valuations
All Consumer Defensive valuationsDCF and P/E value BF-B with different methods and assumptions, so the two conclusions can differ. Compare the P/E fair value.
Price as of 2026-10-06. Financial data from Financial Modeling Prep (trailing twelve months) · Valuation methodology by Charlie Wang.
This is an estimate, not investment advice.