Intrinsic value of Brown-Forman Cl A - BF-A

Previous Close

$56.18

  Intrinsic Value

$27.40

stock screener

  Rating & Target

str. sell

-51%

  Value-price divergence*

+17%

Previous close

$56.18

 
Intrinsic value

$27.40

 
Up/down potential

-51%

 
Rating

str. sell

 
Value-price divergence*

+17%

*Intrinsic value change (in %) minus stock price change (in %) in the past 12 months.

We calculate the intrinsic value of BF-A stock by summing up the current values of future distributable cash flows generated by the company and dividing the sum by the number of outstanding shares. As such, the intrinsic value calculation depends entirely on projections. The more accurate your projections of the company's performance are - the more reliable is the intrinsic value calculation result. Please make sure to check the stock valuation input data below and adjust it if necessary. The quality of the output (intrinsic valuation result) is only as good as the quality of the input. See also DISCLAIMERS.

STOCK VALUATION INPUT DATA

Revenue (in 2017), $M
Initial revenue growth rate, %
Terminal revenue growth rate, %
Revenue decline factor
Initial discount rate, %
Discount rate multiplier
Variable cost ratio, %
Fixed operating expenses, $M
Interest rate on debt, %
Effective corporate tax rate, %
Production assets / Revenue, %
Life of production assets, yrs
Working capital / Revenue, %
Revenue / Adjusted assets
Adjusted equity ratio
Cash flow adjustment, % of Revenue
Book value of equity, $M
Shares outstanding, mln
Market capitalization, $bln 21.1

 

FINANCIAL STATEMENTS FORECAST and PRESENT VALUE CALCULATION

Fiscal year
2017(a)
   2018
   2019
   2020
   2021
   2022
   2023
   2024
   2025
   2026
   2027
   2028
   2029
   2030
   2031
   2032
   2033
   2034
   2035
   2036
   2037
   2038
   2039
   2040
   2041
   2042
   2043
   2044
   2045
   2046
   2047

INCOME STATEMENT

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenue growth rate, %
  -3.08
  2.00
  2.30
  2.57
  2.81
  3.03
  3.23
  3.41
  3.57
  3.71
  3.84
  3.95
  4.06
  4.15
  4.24
  4.31
  4.38
  4.44
  4.50
  4.55
  4.59
  4.64
  4.67
  4.70
  4.73
  4.76
  4.78
  4.81
  4.83
  4.84
  4.86
Revenue, $m
  2,994
  3,054
  3,124
  3,204
  3,295
  3,394
  3,504
  3,623
  3,753
  3,892
  4,041
  4,201
  4,371
  4,553
  4,746
  4,950
  5,167
  5,397
  5,640
  5,897
  6,167
  6,453
  6,755
  7,073
  7,407
  7,760
  8,131
  8,522
  8,933
  9,366
  9,821
Variable operating expenses, $m
 
  1,538
  1,571
  1,610
  1,653
  1,701
  1,753
  1,810
  1,872
  1,939
  2,010
  2,012
  2,093
  2,180
  2,273
  2,371
  2,474
  2,584
  2,701
  2,824
  2,953
  3,090
  3,235
  3,387
  3,547
  3,716
  3,894
  4,081
  4,278
  4,485
  4,703
Fixed operating expenses, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total operating expenses, $m
  2,005
  1,538
  1,571
  1,610
  1,653
  1,701
  1,753
  1,810
  1,872
  1,939
  2,010
  2,012
  2,093
  2,180
  2,273
  2,371
  2,474
  2,584
  2,701
  2,824
  2,953
  3,090
  3,235
  3,387
  3,547
  3,716
  3,894
  4,081
  4,278
  4,485
  4,703
Operating income, $m
  989
  1,516
  1,553
  1,595
  1,642
  1,694
  1,751
  1,813
  1,880
  1,953
  2,031
  2,189
  2,278
  2,373
  2,473
  2,580
  2,693
  2,813
  2,939
  3,073
  3,214
  3,363
  3,520
  3,686
  3,860
  4,044
  4,238
  4,441
  4,656
  4,881
  5,118
EBITDA, $m
  1,047
  1,635
  1,673
  1,716
  1,764
  1,818
  1,876
  1,940
  2,010
  2,084
  2,164
  2,250
  2,341
  2,438
  2,541
  2,651
  2,767
  2,890
  3,020
  3,158
  3,303
  3,456
  3,617
  3,788
  3,967
  4,156
  4,354
  4,564
  4,784
  5,016
  5,259
Interest expense (income), $m
  48
  69
  71
  74
  76
  80
  83
  87
  91
  96
  101
  107
  112
  118
  125
  132
  139
  147
  155
  164
  173
  183
  193
  204
  215
  227
  240
  253
  268
  282
  298
Earnings before tax, $m
  933
  1,447
  1,482
  1,521
  1,565
  1,614
  1,668
  1,726
  1,789
  1,857
  1,930
  2,083
  2,166
  2,254
  2,348
  2,448
  2,554
  2,666
  2,784
  2,909
  3,041
  3,180
  3,327
  3,482
  3,645
  3,817
  3,998
  4,188
  4,388
  4,599
  4,820
Tax expense, $m
  264
  391
  400
  411
  423
  436
  450
  466
  483
  501
  521
  562
  585
  609
  634
  661
  690
  720
  752
  785
  821
  859
  898
  940
  984
  1,031
  1,079
  1,131
  1,185
  1,242
  1,302
Net income, $m
  669
  1,057
  1,082
  1,110
  1,143
  1,178
  1,217
  1,260
  1,306
  1,355
  1,409
  1,520
  1,581
  1,646
  1,714
  1,787
  1,864
  1,946
  2,032
  2,124
  2,220
  2,322
  2,429
  2,542
  2,661
  2,786
  2,918
  3,057
  3,203
  3,357
  3,519

BALANCE SHEET

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Cash and short-term investments, $m
  182
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Total assets, $m
  4,625
  4,531
  4,635
  4,754
  4,888
  5,036
  5,199
  5,376
  5,568
  5,774
  5,996
  6,233
  6,486
  6,755
  7,041
  7,345
  7,667
  8,008
  8,368
  8,749
  9,151
  9,575
  10,022
  10,494
  10,990
  11,514
  12,064
  12,644
  13,254
  13,896
  14,571
Adjusted assets (=assets-cash), $m
  4,443
  4,531
  4,635
  4,754
  4,888
  5,036
  5,199
  5,376
  5,568
  5,774
  5,996
  6,233
  6,486
  6,755
  7,041
  7,345
  7,667
  8,008
  8,368
  8,749
  9,151
  9,575
  10,022
  10,494
  10,990
  11,514
  12,064
  12,644
  13,254
  13,896
  14,571
Revenue / Adjusted assets
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
  0.674
Average production assets, $m
  1,289
  1,316
  1,346
  1,381
  1,420
  1,463
  1,510
  1,562
  1,617
  1,677
  1,742
  1,811
  1,884
  1,962
  2,045
  2,134
  2,227
  2,326
  2,431
  2,541
  2,658
  2,781
  2,911
  3,048
  3,193
  3,345
  3,505
  3,673
  3,850
  4,037
  4,233
Working capital, $m
  1,381
  1,527
  1,562
  1,602
  1,647
  1,697
  1,752
  1,812
  1,876
  1,946
  2,021
  2,100
  2,186
  2,276
  2,373
  2,475
  2,584
  2,699
  2,820
  2,948
  3,084
  3,227
  3,377
  3,536
  3,704
  3,880
  4,066
  4,261
  4,467
  4,683
  4,911
Total debt, $m
  2,149
  2,029
  2,102
  2,184
  2,277
  2,379
  2,492
  2,614
  2,747
  2,890
  3,043
  3,207
  3,382
  3,568
  3,767
  3,977
  4,199
  4,435
  4,685
  4,948
  5,226
  5,520
  5,829
  6,156
  6,499
  6,861
  7,243
  7,644
  8,066
  8,510
  8,977
Total liabilities, $m
  3,255
  3,135
  3,208
  3,290
  3,383
  3,485
  3,598
  3,720
  3,853
  3,996
  4,149
  4,313
  4,488
  4,674
  4,873
  5,083
  5,305
  5,541
  5,791
  6,054
  6,332
  6,626
  6,935
  7,262
  7,605
  7,967
  8,349
  8,750
  9,172
  9,616
  10,083
Total equity, $m
  1,370
  1,396
  1,428
  1,464
  1,506
  1,551
  1,601
  1,656
  1,715
  1,778
  1,847
  1,920
  1,998
  2,081
  2,169
  2,262
  2,361
  2,466
  2,577
  2,695
  2,818
  2,949
  3,087
  3,232
  3,385
  3,546
  3,716
  3,894
  4,082
  4,280
  4,488
Total liabilities and equity, $m
  4,625
  4,531
  4,636
  4,754
  4,889
  5,036
  5,199
  5,376
  5,568
  5,774
  5,996
  6,233
  6,486
  6,755
  7,042
  7,345
  7,666
  8,007
  8,368
  8,749
  9,150
  9,575
  10,022
  10,494
  10,990
  11,513
  12,065
  12,644
  13,254
  13,896
  14,571
Debt-to-equity ratio
  1.569
  1.450
  1.470
  1.490
  1.510
  1.530
  1.560
  1.580
  1.600
  1.620
  1.650
  1.670
  1.690
  1.720
  1.740
  1.760
  1.780
  1.800
  1.820
  1.840
  1.850
  1.870
  1.890
  1.900
  1.920
  1.930
  1.950
  1.960
  1.980
  1.990
  2.000
Adjusted equity ratio
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308
  0.308

CASH FLOW

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Net income, $m
  669
  1,057
  1,082
  1,110
  1,143
  1,178
  1,217
  1,260
  1,306
  1,355
  1,409
  1,520
  1,581
  1,646
  1,714
  1,787
  1,864
  1,946
  2,032
  2,124
  2,220
  2,322
  2,429
  2,542
  2,661
  2,786
  2,918
  3,057
  3,203
  3,357
  3,519
Depreciation, amort., depletion, $m
  58
  119
  120
  121
  123
  124
  126
  127
  129
  131
  133
  60
  63
  65
  68
  71
  74
  78
  81
  85
  89
  93
  97
  102
  106
  111
  117
  122
  128
  135
  141
Funds from operations, $m
  545
  1,176
  1,202
  1,232
  1,265
  1,302
  1,343
  1,387
  1,435
  1,487
  1,542
  1,581
  1,644
  1,711
  1,782
  1,858
  1,939
  2,024
  2,113
  2,208
  2,309
  2,414
  2,526
  2,643
  2,767
  2,898
  3,035
  3,180
  3,332
  3,492
  3,660
Change in working capital, $m
  -94
  30
  35
  40
  45
  50
  55
  60
  65
  70
  75
  80
  85
  91
  96
  102
  108
  115
  121
  128
  135
  143
  151
  159
  167
  176
  186
  195
  206
  216
  228
Cash from operations, $m
  639
  1,146
  1,167
  1,192
  1,220
  1,252
  1,288
  1,328
  1,370
  1,417
  1,467
  1,501
  1,559
  1,620
  1,686
  1,756
  1,830
  1,909
  1,992
  2,080
  2,173
  2,271
  2,375
  2,484
  2,600
  2,721
  2,849
  2,984
  3,126
  3,275
  3,432
Maintenance CAPEX, $m
  0
  -43
  -44
  -45
  -46
  -47
  -49
  -50
  -52
  -54
  -56
  -58
  -60
  -63
  -65
  -68
  -71
  -74
  -78
  -81
  -85
  -89
  -93
  -97
  -102
  -106
  -111
  -117
  -122
  -128
  -135
New CAPEX, $m
  -115
  -27
  -30
  -35
  -39
  -43
  -47
  -51
  -56
  -60
  -64
  -69
  -73
  -78
  -83
  -88
  -94
  -99
  -105
  -111
  -117
  -123
  -130
  -137
  -144
  -152
  -160
  -168
  -177
  -186
  -196
Cash from investing activities, $m
  -422
  -70
  -74
  -80
  -85
  -90
  -96
  -101
  -108
  -114
  -120
  -127
  -133
  -141
  -148
  -156
  -165
  -173
  -183
  -192
  -202
  -212
  -223
  -234
  -246
  -258
  -271
  -285
  -299
  -314
  -331
Free cash flow, $m
  217
  1,076
  1,093
  1,112
  1,135
  1,162
  1,192
  1,226
  1,263
  1,303
  1,347
  1,374
  1,425
  1,479
  1,537
  1,599
  1,665
  1,735
  1,810
  1,888
  1,972
  2,060
  2,152
  2,250
  2,354
  2,463
  2,578
  2,699
  2,826
  2,961
  3,102
Issuance/(repayment) of debt, $m
  565
  62
  72
  82
  93
  103
  113
  123
  133
  143
  153
  164
  175
  186
  198
  210
  223
  236
  249
  263
  278
  294
  310
  326
  344
  362
  381
  401
  422
  444
  467
Issuance/(repurchase) of shares, $m
  -561
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash from financing (excl. dividends), $m  
  -11
  62
  72
  82
  93
  103
  113
  123
  133
  143
  153
  164
  175
  186
  198
  210
  223
  236
  249
  263
  278
  294
  310
  326
  344
  362
  381
  401
  422
  444
  467
Total cash flow (excl. dividends), $m
  193
  1,138
  1,165
  1,195
  1,228
  1,265
  1,305
  1,348
  1,395
  1,446
  1,500
  1,538
  1,600
  1,666
  1,736
  1,810
  1,888
  1,971
  2,059
  2,152
  2,250
  2,353
  2,462
  2,577
  2,698
  2,825
  2,959
  3,100
  3,249
  3,405
  3,569
Retained Cash Flow (-), $m
  192
  -26
  -32
  -37
  -41
  -46
  -50
  -55
  -59
  -64
  -68
  -73
  -78
  -83
  -88
  -94
  -99
  -105
  -111
  -117
  -124
  -131
  -138
  -145
  -153
  -161
  -170
  -179
  -188
  -198
  -208
Prev. year cash balance distribution, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash flow adjustment, $m
 
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
  0
Cash available for distribution, $m
 
  1,113
  1,133
  1,158
  1,187
  1,219
  1,255
  1,294
  1,336
  1,382
  1,432
  1,465
  1,522
  1,583
  1,647
  1,716
  1,789
  1,866
  1,948
  2,035
  2,126
  2,222
  2,324
  2,432
  2,545
  2,664
  2,789
  2,922
  3,061
  3,207
  3,361
Discount rate, %
 
  7.10
  7.46
  7.83
  8.22
  8.63
  9.06
  9.51
  9.99
  10.49
  11.01
  11.57
  12.14
  12.75
  13.39
  14.06
  14.76
  15.50
  16.27
  17.09
  17.94
  18.84
  19.78
  20.77
  21.81
  22.90
  24.04
  25.25
  26.51
  27.83
  29.22
PV of cash for distribution, $m
 
  1,039
  981
  924
  865
  806
  746
  685
  624
  563
  504
  440
  385
  333
  284
  239
  198
  161
  129
  102
  78
  59
  44
  32
  22
  15
  10
  7
  4
  3
  2
Current shareholders' claim on cash, %
  100
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0
  100.0

Brown-Forman Corporation is a spirit and wine company. The Company manufactures, bottles, imports, exports, markets and sells a range of alcoholic beverages. The Company has a portfolio of approximately 40 spirit, wine and ready-to-drink cocktail (RTD) brands. Its principal brands include Jack Daniel's Tennessee Whiskey, Jack Daniel's RTDs, Jack Daniel's Tennessee Honey, Gentleman Jack Rare Tennessee Whiskey, Jack Daniel's Tennessee Fire, Jack Daniel's Single Barrel Collection, Jack Daniel's Sinatra Select, Jack Daniel's Winter Jack, Jack Daniel's No. 27 Gold Tennessee Whiskey, Finlandia Vodkas, Finlandia RTDs, Korbel California Brandy, Woodford Reserve Kentucky Bourbons, el Jimador Tequilas, el Jimador New Mix RTDs, Herradura Tequilas, Canadian Mist Canadian Whisky, Sonoma-Cutrer California Wines, Early Times Kentucky Whisky and Bourbon, Chambord Liqueur, Old Forester Kentucky Bourbon, Antiguo Tequila, Pepe Lopez Tequila, Santa Dose Cachaca and Collingwood Canadian Whisky.

FINANCIAL RATIOS  of  Brown-Forman Cl A (BF-A)

Valuation Ratios
P/E Ratio 32.3
Price to Sales 7.2
Price to Book 15.8
Price to Tangible Book
Price to Cash Flow 33.8
Price to Free Cash Flow 41.2
Growth Rates
Sales Growth Rate -3.1%
Sales - 3 Yr. Growth Rate %
EPS Growth Rate %
EPS - 3 Yr. Growth Rate %
Capital Spending Gr. Rate 4.5%
Cap. Spend. - 3 Yr. Gr. Rate -2.3%
Financial Strength
Quick Ratio 0
Current Ratio 0.1
LT Debt to Equity 123.3%
Total Debt to Equity 156.9%
Interest Coverage 20
Management Effectiveness
Return On Assets 16%
Ret/ On Assets - 3 Yr. Avg. 19.7%
Return On Total Capital 20.3%
Ret/ On T. Cap. - 3 Yr. Avg. 25.8%
Return On Equity 45.6%
Return On Equity - 3 Yr. Avg. 47.3%
Asset Turnover 0.7
Profitability Ratios
Gross Margin 67.5%
Gross Margin - 3 Yr. Avg. 68.9%
EBITDA Margin 34.7%
EBITDA Margin - 3 Yr. Avg. 40.2%
Operating Margin 33%
Oper. Margin - 3 Yr. Avg. 38.5%
Pre-Tax Margin 31.2%
Pre-Tax Margin - 3 Yr. Avg. 37.1%
Net Profit Margin 22.3%
Net Profit Margin - 3 Yr. Avg. 26.2%
Effective Tax Rate 28.3%
Eff/ Tax Rate - 3 Yr. Avg. 29.5%
Payout Ratio 41%

BF-A stock valuation input parameters

Revenue. Company's revenue (or sales) is always the starting point of any cash flow forecast. In the BF-A stock intrinsic value calculation we used $2994 million for the last fiscal year's total revenue generated by Brown-Forman Cl A. The default revenue input number comes from 2017 income statement of Brown-Forman Cl A. You may change it if you feel that it should be adjusted for some unusual circumstances that are not expected to be repeated in the future or if you already know (from interim financial statements, for example) that this year's revenue is going to be quite different.

Revenue growth rate. Forecasted future revenue growth rate is the most important input parameter for the intrinsic value calculation. Unlike other input parameters that are reasonably expected to be in line with their historic averages or their historic trends, the revenue growth rate by and large is a wild card: nobody really knows what the company's revenue will be in the future. Of course, the level of unpredictability is different for different industries (utility companies being the most predictable and, thus, less risky).
    We use three input parameters to forecast the revenue growth rate in our BF-A stock valuation model: a) initial revenue growth rate of 2% whose default value is the revenue growth rate in the most recent quarter compared to the quarterly revenue a year ago; b) terminal revenue growth rate of 5% whose default value is chosen to be close to the average nominal (i.e. not adjusted for inflation) GDP growth rate; and c) revenue decline factor of 0.9, which stipulates that revenue growth rate in each forecasted year will be equal to the difference of the revenue growth rate in the preceding year and the terminal revenue growth rate multiplied by this revenue decline factor (with the passage of time the revenue growth rate will be approaching the terminal revenue growth rate, but not quite reaching it - though the difference could be infinitesimally small).
    At the revenue decline factor of 1, the future revenue growth rate is forecasted to be constant and equal to the initial revenue growth rate. The smaller the revenue decline factor, the faster the revenue growth rate will approach the terminal revenue growth.

Discount rate. The discount rate is used for determining the present value of future cash flows: future cash flows are "discounted" as at normal conditions (that translate into positive expected return on investment) one dollar today is worth more than the same dollar in the future. Unlike all other valuation models, we use variable discount rate, i.e. it increases for each consecutive year. This is done to account for higher risk of cash flows coming in further in the future.
    The initial discount rate of 7.1%, whose default value for BF-A is calculated based on our internal credit rating of Brown-Forman Cl A, is applied to the cash flow expected to be received a year from now (well, actually, to be precise, in the financial year following the base year - the last year for which we have financial statements). For each consecutive year the discount rate is multiplied by the discount rate multiplier of 1.05, e.i. each year it increases by 5%. Feel free to change this number to correspond to your level of risk assessment of Brown-Forman Cl A.
    By the way, it is easy to set the discount rate to be constant (this would make comparison with other valuation models easier): just set the discount rate multiplier equal to 1 and chose the magnitude of the initial discount rate to your liking.

Variable cost ratio is the ratio of variable costs (i.e. costs that fluctuate with fluctuation of the volume of production) to the revenue expressed as a percentage. In the calculation of intrinsic value of BF-A stock the variable cost ratio is equal to 50.4%.

Fixed operating expenses is just that - expenses that are not dependant on the volume of production. They are set to $0 million in the base year in the intrinsic value calculation for BF-A stock. These expenses increase with the level of inflation in subsequent years.

Interest rate on debt is the average all-in rate of interest paid by the company on its debt. It is set at 3.5% for Brown-Forman Cl A.

Corporate tax rate of 27% is the nominal tax rate for Brown-Forman Cl A. In reality, companies find ways to pay much less taxes than that or not to pay them at all.

Cash flow adjustment could be used for any adjustment the investor deems necessary. Most commonly we use this field to account for stock options-related effects in excess of what is reported on the company's income statement. The cash flow adjustment is expressed as a percentage of the revenue, and in the current valuation of the BF-A stock is equal to 0%.

Production assets are the company's assets used for manufacturing products or provision of services. In the valuation model input table they are expressed as a percentage of revenue and for BF-A are equal to 43.1%.

Life of production assets of 33.8 years is the average useful life of capital assets used in Brown-Forman Cl A operations. It is used to calculate yearly capital expenditures needed to keep these assets in good order - we call it the maintenance CAPEX.

Working capital is the difference between the company's current assets and liabilities. In the model we use the ratio of working capital to revenue, which for BF-A is equal to 50%. A negative number means that the company is apt at using financial resources of its suppliers and customers; a large positive number, on the other hand, means that it either provides in-kind financing to others or is not good at managing its inventories.

Book value of equity - $1370 million for Brown-Forman Cl A - is used in calculation of the "floor" for intrinsic valuation based on the discounted cash flow (DCF) method. Even if the prospects are very bad for a company, its assets could always be sold now for their current fair market value.

Shares outstanding of 375.236 million for Brown-Forman Cl A is needed to calculate the intrinsic value of one share.

Market capitalization is used here only for reference purposes and as a quick check that the share price and the number of shares outstanding numbers are correct - something especially to be cognizant about at stock splits. So, the market capitalization of Brown-Forman Cl A at the current share price and the inputted number of shares is $21.1 billion.

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COMPANY NEWS

▶ Old Forester delays Main Street opening, announces new distillery leadership   [Oct-17-17 10:19AM  American City Business Journals]
▶ Brown-Forman, Sazerac alum takes another job in the industry   [Oct-12-17 10:58AM  American City Business Journals]
▶ Brown-Forman Names U.K. Country Manager   [09:39AM  Business Wire]
▶ Drink to the Bullish Charts of Brown-Forman   [Oct-10-17 02:12PM  TheStreet.com]
▶ Drink to the Bullish Charts of Brown-Forman.   [02:12PM  TheStreet.com]
▶ How Safe Is Brown-Forman's Dividend?   [Sep-26-17 08:17AM  Motley Fool]
▶ Top Losers in the Consumer Sector: September 1115, 2017   [Sep-18-17 12:59PM  Market Realist]
▶ Brown Forman Earns Relative Strength Rating Upgrade; Hits Key Benchmark   [Sep-08-17 03:00AM  Investor's Business Daily]
▶ Brown Forman Trying To Close In On Key Technical Benchmark   [03:00AM  Investor's Business Daily]
▶ Brown-Forman posts 1Q profit   [08:03PM  Associated Press]
▶ Company News For August 31, 2017   [10:07AM  Zacks]
▶ Brown-Forman: Spirits Are Still Rising   [10:50AM  Barrons.com]
▶ No Regrets, Jack Daniel's?   [10:42AM  Bloomberg]
▶ Consumer Sector: Pre-Earnings Coverage for This Week   [Aug-28-17 11:08AM  Market Realist]
▶ Brown-Forman Stockholders Elect Directors   [Jul-27-17 03:03PM  Business Wire]
▶ ETFs with exposure to Brown-Forman Corp. : July 12, 2017   [Jul-12-17 02:13PM  Capital Cube]
▶ Wilby Retires from Brown-Forman   [Jul-07-17 08:00AM  Business Wire]
▶ Brown-Formans new special release celebrates a historic bourbon   [07:35AM  American City Business Journals]
▶ [$$] Constellation Brands: A Split-Up in the Stars?   [Jun-11-17 11:15PM  Barrons.com]
▶ Brown-Forman Can Overcome Headwinds   [Jun-07-17 03:54PM  Morningstar]
▶ Stocks to Watch: Coke, Pepsi, UnitedHealth, Ambarella, AMD   [09:27AM  The Wall Street Journal]
▶ Brown-Forman posts 4Q profit   [08:06AM  Associated Press]
▶ Jim Cramer Previews Brown-Forman's Earnings   [12:41PM  TheStreet.com]
Financial statements of BF-A
Valuation of Stocks

The paper VALUATION OF STOCKS: The Quest for Intrinsic Value provides a detailed description of our valuation model and discloses the calculation algorithm.

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