Brown-Forman's (BF.A, BF.B) top-line and profit growth will likely remain muted given the lackluster US and global demand for spirits, tariff risk, structural headwinds to alcohol consumption, and American whiskey oversupply, Morgan Stanley said in a note to clients Thursday.

The investment firm said the weak demand is both "cyclical and secular" due to structural headwinds from demographics, health and wellness concerns, and cannabis.

Tariff and political risk is likely to impact the company, which generated about 55% of its sales outside the US in fiscal year 2024, according to the note.

Brown-Forman is also not spared from potential pricing or market share pressure from American whiskey oversupply, with industry barreled whiskey inventories up 33% from 2021, the note said.

Morgan Stanley downgraded Brown-Forman's rating to underweight from equal-weight, and cut its price target to $32 from $47.