Better Buy: Wayfair or Brown‑Forman as Their Stocks Diverge to 52‑Week Highs and Lows?

In Tuesday's trading, the S&P 500 hit an all-time high of 6,957.40. It’s gained nearly 18% over the past 12 months. Analysts expect the index to finish higher in 2026 for the fourth consecutive year. 

Chart Kid Matt’s creator, Matt Carminaro, published an excellent piece on his blog on Wednesday morning showing that the index’s other 493 stocks have begun to outperform the Magnificent 7, highlighting that “The Great Broadening” is already underway.   

With that being the case, one would think that the new 52-week highs would outnumber the new 52-week lows; that’s precisely the case. As I write this, there are 111 new 52-week highs and 21 new 52-week lows on the NYSE; the high-to-low ratio on the Nasdaq is 180:54. Both are rising in Wednesday morning trading. 

Among the new 52-week lows is online furniture retailer Wayfair (W) at $115.80, its 33rd of the past 12 months. On the other end of the spectrum, Jack Daniel's producer Brown-Forman (BF.B) hit its 17th new 52-week low at $25.46.   

Clearly, these two stocks are moving in opposite directions. The Barchart Technical Opinion says Wayfair is a Strong Buy, while Brown-Forman is a Strong Sell.

Which is the better buy? The answer seems simple enough. It’s Wayfair. Here’s why that might not be 100% accurate, especially over the long haul, say 3-5 years. 

Is the Liquor Business Toast?

Google the phrase “people are drinking less,” and you’ll get thousands of results. I don’t think there’s any question that’s the case. Both Brown-Forman and Diageo (DEO) wouldn’t keep hitting new 52-week lows if that weren’t true. 

But much like moviegoers and the box office, historically, the consumption of alcohol--and more specifically, the kinds of alcohol consumed--has come and gone in waves, often precipitated by perceived or real health concerns. 

As an investor, one must determine whether this latest downturn is a secular trend or a phase people, especially Gen Zers, are going through.

An article from the Colorado Sun in early December reported that 54% of Americans drink, an all-time low, well below the all-time highs of 68%-71% in the 1970s and early 80s.

Interestingly, according to Gallup, over the last three years (2023 to 2025), the share of people who drank and had a household income of less than $40,000 fell by 14 percentage points, from 53% in 2023 to 39% in 2025. 

Meanwhile, the decline among households earning $40,000 to $99,999 fell by four percentage points to 54%, while the share of drinkers among those earning $100,000 or more fell 13 percentage points to 66% in 2025, down from 79% in 2023.    

The Gallup data offer a possible explanation for the decline in drinking. 

First, the fact that only 39% of households earning $40,000 or less drink has just as much to do with overall affordability in America as it does with a health movement. Many of these households are individuals who haven’t completed high school and are cutting where they can to pay the bills. Booze is an easy drop. 

Secondly, while the 13-percentage-point decline among those earning over $100,000 may be due to health concerns, it’s just as likely that wealthy Americans overdid it during COVID, and the last two years’ declines have been more about resetting their historical norms.

A mid-December Fortune commentary by Julian Braithwaite, Director General of the International Alliance for Responsible Drinking (IARD), notes that despite softness in global markets, regular drinkers continue to maintain their historical drinking patterns. 

“In the United States, the average number of drinks per adult per week has hovered between 10 and 12 for decades and is only modestly below its 2021 peak,” Braithwaite said.  

I’m not suggesting that drinking demographics aren’t changing. 

All I’m saying is that Brown-Forman and all the other large, publicly-traded alcoholic beverage providers continue to face the same headwinds: massively unsustainable comparables from 2021 and an affordability crisis that’s made every income group question the amount they spend on alcohol. 

Lastly, and it’s not something I want to dwell on, but a significant number of people have forgone alcohol for cannabis. So, naturally, fewer people are drinking. 

That said, companies like Brown-Forman face the same healthy-living challenge that food companies like Campbell Soup (CPB) and Kraft Heinz (KHC) have faced for the past decade. They’ll have to adapt or die. I believe Brown-Forman can meet the challenge. 

Do I think reduced drinking is a secular trend or a phase we’re going through? More of the latter than the former. 

Wayfair Continues to Mesmerize Investors

Wayfair’s share price is at its highest since April 2022, nearly four years ago. People can’t get enough of the online furniture retailer’s stock. As a result, W is up 143% in the past 12 months. 

I am bearish about Wayfair’s business and stock. I have been since it went public in October 2014 at $29 per share. In 2025, I wrote about it on two occasions: March 19 and Aug. 8.

In the former, as I would soon find out, the worm was just about to turn. It had just hit its 28th new 52-week low of the past 12 months. I wondered whether it was time to buy. Its share price was around $30. In hindsight, we know the answer to that question.

“I continue to remain a skeptic of Wayfair’s business model. It’s too marketing-driven to generate an appropriate return on invested capital. But there are always going to be bottom feeders looking for cigar butts like Wayfair,” I wrote.

I did, however, suggest the Dec. 19/2025 $95 call, which I stated had no chance of being above the strike price by Christmas. In fact, it closed trading on Dec. 19 at $101.70, ITM (in the money) by $6.70. It reached $114.67 on Nov. 26. The bid price for the $97.50 strike was $17.70. You would have made out like a bandit by selling and closing out the call. But I digress.

In August, I continued to argue that most risk-averse investors shouldn’t own Wayfair. 

“Since Wayfair went public in October 2014, it’s had just six quarters out of 45 where it has made money on a GAAP basis from its continuing operations. The most recent example was this past quarter. Its best stretch of profitability was during COVID-19, when it had five consecutive profitable quarters from Q2 2020 through Q2 2021,” I wrote. 

The company has reported one quarter since August: its Q3 2025 results in late October were better than expected, with revenue $100 million above Wall Street’s estimate and adjusted EPS of 70 cents, 27 cents above consensus. It reports Q4 2025 on Feb. 19. 

Its financials remain murky. 

Which Is the Better Buy?

Between Sept. 2014 and Sept. 2020, Wayfair’s Q3 revenue grew 1,042%, from $336.2 million to $3.84 billion. Revenues then fell by 18.8% over the following five third-quarter reports. 

There have been 12 Q3 reports between 2014 and 2025. Only once did it generate a profit from continuing operations--$173 million in 2020. In Q3 2025, it lost $99 million, $25 million higher than in Q3 2024. 

Analysts, according to S&P Global Market Intelligence, expect Wayfair to generate $718.50 million in adjusted EBITDA (earnings before interest, taxes, depreciation, and amortization). Its enterprise value of $16.86 billion is 23.5 times its non-GAAP profit. 

If Wayfair didn’t have such a poor history of making money, I might be willing to overlook the nosebleed multiple. However, it can’t make this claim and likely never will. 

At Brown-Forman, it faces the issues mentioned earlier, and Canada isn’t buying what it’s selling, which has taken a big bite out of its sales and profits.  

However, it makes money, and should continue to do so. The last time I checked, earnings were the name of the game. 

On Dec. 4, it reported its Q2 2026 results. Sales fell 5% (-2% organically), with earnings per share down 14% from last year to $0.47. As it said in its press release, the remainder of 2026 won’t be much better, with sales and operating income declining in the low single digits.

It’s bleak, but that’s where you find the opportunities. 

Analysts expect it to earn $1.65 a share in 2026. It trades at 15.4 times this estimate. Its enterprise value of $14.42 billion is 12.1 times its 2026 EBITDA estimate of $1.19 billion, or about half of Wayfair’s multiple. 

I’ll take Brown-Forman over Wayfair every day and twice on Sunday. The former has a storied history and pays a nice dividend. The latter is chasing a dream and does not. 

If you believe price matters, there’s no question Brown-Forman is the better buy.