What Happened?
Shares of alcohol company Brown-Forman (NYSE:BF.B) fell 3.7% in the afternoon session after BNP Paribas Exane downgraded the stock to "Underperform" from "Neutral."
The firm also lowered its price target on the spirit and wine company's shares to $24 from a previous target of $31. This adjustment indicated a more pessimistic outlook on the company's prospects. The downgrade from a neutral stance to one suggesting the stock might perform worse than the broader market prompted a negative reaction from investors, leading to the share price decline.
The shares closed the day at $26.42, down 3.7% from previous close.
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What Is The Market Telling Us
Brown-Forman’s shares are not very volatile and have only had 9 moves greater than 5% over the last year. In that context, today’s move indicates the market considers this news meaningful, although it might not be something that would fundamentally change its perception of the business.
The previous big move we wrote about was 2 days ago when the stock gained 2.7% on the news that the company announced that its Woodford Reserve brand would re-release its highly sought-after Double Double Oaked Bourbon.
The product, described as one of the most coveted bottles in American whiskey, became available for a national release. This positive news appeared to outweigh a less optimistic view from Citigroup. The bank maintained its sell rating on Brown-Forman's stock and lowered its price target to $24 from $27. The stock's upward movement suggested that investors focused more on the potential sales boost from the popular whiskey than on the analyst's revised valuation.
Brown-Forman is flat since the beginning of the year, and at $26.40 per share, it is trading 30.5% below its 52-week high of $37.96 from March 2025. Investors who bought $1,000 worth of Brown-Forman’s shares 5 years ago would now be looking at an investment worth $355.58.
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