Brown-Forman Corporation (BF.B)
The Brown Forman Corporation is one of the largest American-owned companies in the spirits and wine business. Based in Louisville, Kentucky, it manufactures several well known brands throughout the world, including Jack Daniel's, Early Times, Old Forester, Woodford Reserve, GlenDronach, BenRiach, Glenglassaugh, Finlandia, Herradura, Korbel, and Chambord.
Stock Price Trends
Stock price trends estimated using linear regression.
Key facts
- The primary trend is decreasing.
- The decline rate of the primary trend is 7.15% per annum.
- BF.B price at the close of May 17, 2024 was $48.47 and was lower than the bottom border of the primary price channel by $1.65 (3.30%).
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 29.37% per annum.
- BF.B price at the close of May 17, 2024 was inside the secondary price channel.
Linear Regression Model
Model equation:
Yi = α + β × Xi + εi
Top border of price channel:
Exp(Yi) = Exp(a + b × Xi + 2 × s)
Bottom border of price channel:
Exp(Yi) = Exp(a + b × Xi – 2 × s)
where:
i - observation number
Yi - natural logarithm of BF.B price
Xi - time index, 1 day interval
σ - standard deviation of εi
a - estimator of α
b - estimator of β
s - estimator of σ
Exp() - calculates the exponent of e
Primary Trend
Start date: September 2, 2020
End date: May 17, 2024
a = 4.4120
b = -0.0002
s = 0.0633
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0002) – 1
= -7.15%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0633) – 1
= 28.80%
September 2, 2020 calculations
Top border of price channel:
Exp(Y326)
= Exp(a + b × X326 + 2 × s)
= Exp(a + b × 471 + 2 × s)
= Exp(4.4120 + -0.0002 × 471 + 2 × 0.0633)
= Exp(4.4427)
= $85.01
Bottom border of price channel:
Exp(Y326)
= Exp(a + b × X326 – 2 × s)
= Exp(a + b × 471 – 2 × s)
= Exp(4.4120 + -0.0002 × 471 – 2 × 0.0633)
= Exp(4.1896)
= $66.00
May 17, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(4.4120 + -0.0002 × 1,824 + 2 × 0.0633)
= Exp(4.1676)
= $64.56
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(4.4120 + -0.0002 × 1,824 – 2 × 0.0633)
= Exp(3.9145)
= $50.12
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 7.15% per annum.
- BF.B price at the close of May 17, 2024 was $48.47 and was lower than the bottom border of the primary price channel by $1.65 (3.30%).
Secondary Trend
Start date: June 13, 2023
End date: May 17, 2024
a = 5.6352
b = -0.0010
s = 0.0496
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0010) – 1
= -29.37%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0496) – 1
= 21.93%
June 13, 2023 calculations
Top border of price channel:
Exp(Y1,024)
= Exp(a + b × X1,024 + 2 × s)
= Exp(a + b × 1,485 + 2 × s)
= Exp(5.6352 + -0.0010 × 1,485 + 2 × 0.0496)
= Exp(4.3198)
= $75.18
Bottom border of price channel:
Exp(Y1,024)
= Exp(a + b × X1,024 – 2 × s)
= Exp(a + b × 1,485 – 2 × s)
= Exp(5.6352 + -0.0010 × 1,485 – 2 × 0.0496)
= Exp(4.1216)
= $61.66
May 17, 2024 calculations
Top border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 + 2 × s)
= Exp(a + b × 1,824 + 2 × s)
= Exp(5.6352 + -0.0010 × 1,824 + 2 × 0.0496)
= Exp(3.9969)
= $54.43
Bottom border of price channel:
Exp(Y1,258)
= Exp(a + b × X1,258 – 2 × s)
= Exp(a + b × 1,824 – 2 × s)
= Exp(5.6352 + -0.0010 × 1,824 – 2 × 0.0496)
= Exp(3.7987)
= $44.64
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 29.37% per annum.
- BF.B price at the close of May 17, 2024 was inside the secondary price channel.