J.P. Morgan Reiterates Neutral Rating on Brown-Forman (BF.B)

J.P. Morgan is out with a research report this morning, where it reiterates its Neutral rating on Brown-Forman Corp. (NYSE: BF.B); it has a $62.00 price target on the stock, up from $58.00. The JPM analysts cited the company’s recent earnings report, which was worse than expected due to a foreign exchange miss and higher costs. Sales were weaker than expected in the US, though some of this negativity was offset by international trends. The analysts noted that management remained cautious on the US, noting that trends were weakening into their fiscal Q1. Underlying net sales in the US were down LSD, vs. up 8% internationally and depletions for Jack Daniels whiskey were -4% in the US (in part due to cycling a buy-in in some states) vs. +9% intl. As for valuation, the analysts remarked, “While trends are generally improving (slowly), the stock is 17.5x our NTM estimates, which imply MSD EPS growth. This multiple is above its 5 year average premium relative to our US beverage group average.”