08:39 AM EDT, 08/30/2024 (MT Newswires) -- Brown-Forman (BF.A, BF.B) and the spirits industry overall are not "completely through its post-pandemic hangover," RBC Capital Markets said in a note to clients Friday.

"Spirits continue to go through a post-pandemic normalization process that could take anywhere from six to 24 months to fully complete," RBC said.

RBC analysts said that because of Brown-Forman's "softer results" in fiscal Q1 and a "still challenging environment," they have lowered their fiscal year 2025 EPS estimate to $1.81 from $1.83.

"Shares have materially underperformed, and historical valuation appears cheap," RBC said. "While this creates a low bar and may limit downside, we don't see shares really gaining momentum until there is greater visibility into category normalization."

The firm maintained its sector perform rating and $49 price target on the stock.