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Brown-Forman Corporation (BF-B)
Intrinsic Value (DCF)
Current$27.42
→
Intrinsic$11.71
-57%
$6.48$11.71$21.64
Market implies 25% growth for 5 years
Current price reflects execution expectations above 8% growth — not unreasonable for quality businesses.
At $27, the market prices in continued strong cash flow growth (25%) — likely reflecting buybacks, margin stability, and ecosystem strength.
Range: Bear $6 → Bull $22. Current price implies expectations above the base case, closer to bull expectations.
| Discount ↓Growth → | 4% | 6% | 8% | 10% |
|---|---|---|---|---|
| 8% | $15 | $17 | $18 | $21 |
| 10% | $9 | $10 | $12 | $13 |
| 12% | $6 | $7 | $8 | $9 |
| 14% | $4 | $5 | $6 | $6 |
Bull Case
- Bull case ($22) with 10% growth, 9% discount rate
- Conservative 8% growth assumption is achievable based on track record
Bear Case
- Bear case ($6) implies 76% downside at 6% growth, 12% discount
- Price reflects 25% growth expectations vs 8% historical — high bar to clear
- Trading 57% above base case — execution must exceed assumptions to justify
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5-Year Free Cash Flow Projection
Year 1$465.48M
Year 2$502.72M
Year 3$542.94M
Year 4$586.37M
Year 5$633.28M
Terminal$9.32B
📐 Model Inputs
Growth Rate8.0%5Y CAGR (cascade: 5Y→3Y→TTM)
Discount Rate10.0%WACC estimate
Terminal Growth3.0%Perpetuity rate
Base Free Cash Flow$431.00MTTM actual
Bear g×0.8, r+2%
Base Historical CAGR
Bull g×1.2, r−1.5%
DCF estimates based on historical growth rates extrapolated forward. See FAQ below for full methodology.