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 33.74% per annum.
- BF.B price at the close of July 25, 2024 was $45.07 and was inside the primary price channel.
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 51.13% per annum.
- BF.B price at the close of July 25, 2024 was higher than the top border of the secondary price channel by $1.22 (2.78%). This indicates a possible reversal in the secondary trend direction.
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: June 21, 2023
End date: July 25, 2024
a = 5.8391
b = -0.0011
s = 0.0510
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0011) – 1
= -33.74%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0510) – 1
= 22.61%
June 21, 2023 calculations
Top border of price channel:
Exp(Y982)
= Exp(a + b × X982 + 2 × s)
= Exp(a + b × 1,426 + 2 × s)
= Exp(5.8391 + -0.0011 × 1,426 + 2 × 0.0510)
= Exp(4.3330)
= $76.17
Bottom border of price channel:
Exp(Y982)
= Exp(a + b × X982 – 2 × s)
= Exp(a + b × 1,426 – 2 × s)
= Exp(5.8391 + -0.0011 × 1,426 – 2 × 0.0510)
= Exp(4.1291)
= $62.12
July 25, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(5.8391 + -0.0011 × 1,826 + 2 × 0.0510)
= Exp(3.8819)
= $48.52
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(5.8391 + -0.0011 × 1,826 – 2 × 0.0510)
= Exp(3.6781)
= $39.57
Description
- The primary trend is decreasing.
- The decline rate of the primary trend is 33.74% per annum.
- BF.B price at the close of July 25, 2024 was $45.07 and was inside the primary price channel.
Secondary Trend
Start date: February 1, 2024
End date: July 25, 2024
a = 7.2994
b = -0.0020
s = 0.0318
Annual growth rate:
Exp(365 × b) – 1
= Exp(365 × -0.0020) – 1
= -51.13%
Price channel spread:
Exp(4 × s) – 1
= Exp(4 × 0.0318) – 1
= 13.54%
February 1, 2024 calculations
Top border of price channel:
Exp(Y1,137)
= Exp(a + b × X1,137 + 2 × s)
= Exp(a + b × 1,651 + 2 × s)
= Exp(7.2994 + -0.0020 × 1,651 + 2 × 0.0318)
= Exp(4.1241)
= $61.81
Bottom border of price channel:
Exp(Y1,137)
= Exp(a + b × X1,137 – 2 × s)
= Exp(a + b × 1,651 – 2 × s)
= Exp(7.2994 + -0.0020 × 1,651 – 2 × 0.0318)
= Exp(3.9971)
= $54.44
July 25, 2024 calculations
Top border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 + 2 × s)
= Exp(a + b × 1,826 + 2 × s)
= Exp(7.2994 + -0.0020 × 1,826 + 2 × 0.0318)
= Exp(3.7808)
= $43.85
Bottom border of price channel:
Exp(Y1,257)
= Exp(a + b × X1,257 – 2 × s)
= Exp(a + b × 1,826 – 2 × s)
= Exp(7.2994 + -0.0020 × 1,826 – 2 × 0.0318)
= Exp(3.6538)
= $38.62
Description
- The secondary trend is decreasing.
- The decline rate of the secondary trend is 51.13% per annum.
- BF.B price at the close of July 25, 2024 was higher than the top border of the secondary price channel by $1.22 (2.78%). This indicates a possible reversal in the secondary trend direction.