02:22 PM EDT, 05/30/2024 (MT Newswires) -- Brown-Forman (BF.B) is expected to issue "more cautious" fiscal 2025 guidance amid continued pressures. particularly in the US, RBC Capital Markets said in a report Thursday.

US macros, slowing away from home, "muted performance" for key brands and a boost promotional spending by rivals suggest a "cautious stance," RBC said.

Margins have been under pressure from foreign exchange headwinds and inflation, while "spirits continue to go through a post-pandemic normalization process" after demand had boosted sales, and that may take six to 24 months, the report said.

Promotional activity by rivals put Brown-Forman's Jack Daniel's whiskey and tequila portfolio under pressure, RBC said.

"We believe we are still a few quarters away from better category visibility," and "we are not eager to step in" on the stock, RBC said.

RBC has a sector perform rating on the stock and a $56 price target. Brown-Forman results for Q4 and the fiscal year are expected June 5.

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