10 Best Beverage Stocks to Buy According to Analysts

3. Brown-Forman Corporation (NYSE:BF-B)

Average Share Price Upside Potential as of February 20: 46.22%

Brown-Forman Corporation (NYSE:BF-B) is engaged in the manufacturing and distribution of various alcoholic beverages, including wine, whiskey, vodka, scotch, tequila, and liqueur. Its brands include Jack Daniel, Old Forester, Woodford Reserve, and several others.

Last month, the company announced it would lay off 12% of its global workforce as part of a restructuring plan to reduce costs amid changing consumer preferences. The Jack Daniel’s maker has been struggling with high input costs, which has led to an increase in price for its whiskeys. The high cost of living environment is also forcing consumers to shift to cheaper alternatives.

Brown-Forman Corporation (NYSE:BF-B) will also shut its barrel-making facility in Louisville by April 25. The closure will impact around 210 employees. Moving ahead, the company will source barrels externally from an unnamed supplier. The restructuring plan is expected to generate between $70 million and $80 million in annualized savings for the company.

Analysts believe that like most other companies in the spirits sector, Brown-Forman Corporation (NYSE:BF-B) is experiencing a ‘COVID hangover’. Consumers stocked up on alcoholic beverages during the pandemic, resulting in a temporary surge in sales. The demand has slowed down with the situation returning to normal, resulting in flat or negative growth across categories.

Despite Brown-Forman Corporation (NYSE:BF-B)’s share price reaching a 10-year low in January, analysts believe the company is well-placed for long-term growth with global incomes rising and more people across the world gaining access to premium products. While Wall Street analysts have a consensus Hold rating for the stock, they project a 46% increase in BF-B’s share price, making it one of the best beverage stocks to buy.