Up 5%, Treasury Wine (ASX:TWE) share price continues its climb

The Treasury Wine Estates Ltd (ASX: TWE) share price continues to push higher after yesterday’s investor presentation. Let’s take a look.
The post Up 5%, Treasury Wine (ASX:TWE) share price continues its climb appeared first on The Motley Fool Australia. –

rising ASX share price represented by cork popping out of wine bottle

Treasury Wine Estates Ltd (ASX: TWE) shares are continuing to climb today following the company’s investor day presentation on Thursday. At the time of writing, the Treasury Wine share price is trading 5.09% higher at $10.74. This comes after the wine giant added almost 3% to its value during yesterday’s session.

Why the Treasury Wine share price is pushing higher 

The Treasury Wine share price is now up almost 8% since Wednesday’s close after the company’s investor day presentation highlighted key earnings and operational updates. 

Treasury Wine appears to be paving a new growth story beyond its historical dependency on the Chinese market. The investor day presentation noted the “effective closure of [the] Chinese market to Australian COO [country of origin] wine” with a renewed focus for its premium portfolio in core geographies including North America, Europe and Asia (ex-China).  

The presentation forecasts FY21 earnings before interest, tax and SGARA  (the difference between the fair value of harvested grapes and the cost of harvested grapes) to be in the range of $495 million to $515 million. This represents growth of around 33% compared to a year ago. 

What brokers are thinking 

After reviewing the company’s strategy and earnings update, Macquarie retained a neutral rating with a $10.50 target price. Despite the Treasury Wine share price currently trading above this, the broker’s commentary was largely positive. 

Macquarie noted that Treasury Wine’s EBIT guidance of $495 million to $515 million was 8% ahead of the broker’s forecast. Macquarie also highlighted the company’s global supply chain optimisation program, which is expected to deliver annualised benefits of more than $75 million, an increase from the prior guidance of $50 million. 

Macquarie highlighted Treasury’s 2025 strategy, “focused on growth brands and distribution in priority markets to drive premium wine consumption and offset the impact of China”. 

Foolish takeaway 

Today’s gains will come as welcome news for shareholders after the Treasury Wine share price faced multiple sharp selloffs due to the imposition of Chinese tariffs. Judging by the upswing in the company’s shares late this week, investors appear buoyed by Treasury’s new growth story.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited and Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

The post Up 5%, Treasury Wine (ASX:TWE) share price continues its climb appeared first on The Motley Fool Australia.

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