What big brokers think of the Treasury Wine (ASX:TWE) share price now

Big brokers are divided after the slump in the Treasury Wine Estates Ltd (ASX: TWE) share price and new Chinese tariffs on wine imports.
The post What big brokers think of the Treasury Wine (ASX:TWE) share price now appeared first on Motley Fool Australia. –

falling asx wine share price represented by glass of red wine spilling

It has been a rollercoaster ride for the Treasury Wine Estates Ltd (ASX: TWE) share price after Chinese authorities slapped a brutal tariff on Australian wine exports. With the Treasury Wine share price being down almost 50% year to date, here’s what the big brokers think following the major news this week. 

Provisional measure implemented on Australian wine imports into China 

The provisional measure states that, commencing 28 November 2020, a deposit at a rate of 169.3% will be applied to the imported value of Treasury’s wine in containers of two-litres or less. The provisional measure can remain in place until 28 August 2021 at the latest. The final determination of the anti-dumping investigation will determine if the measure will be maintained, adjusted or removed. 

Treasury Wine response 

In FY20, China represented approximately 30% of Treasury Wine’s earnings. The company has been forced to come up with measures to mitigate the effects of the tariffs including redirecting products to other markets, accelerating marketing in other jurisdictions to drive demand and reducing global overhead costs. 

Big broker updates on Treasury Wine share price

Brokers are divided between the fallout of Chinese sales and the opportunity for Treasury Wine to pivot its business into the rest of Asia, Europe and the United States. 

Citigroup Inc (NYSE: C) lowered its Treasury Wine share price target from $10.40 to $8.20 with a sell rating. The broker warns that China’s aggressive stance towards Australian wine imports will have a negative and long-lasting impact on the company and sector. While the broker noted there could be upside from North America operations, it regards the investment case as too risky. 

Credit Suisse Group (NYSE: CS) upgraded the company from neutral to outperform and raised its price target from $8.50 to $11.00. In stark contrast to Citi, it believes that given the recent Treasury Wine share price falls, the worst is now behind the company and the tariffs are temporary. 

Macquarie Group Ltd (ASX: MQG) retains a neutral rating and a $10.60 price target. There was no change in the broker’s rating or target after reviewing the news of China’s move. Whilst Macquarie believes there is an opportunity for Treasury to pivot to the rest of Asia, and US operations remain sound, the broker is concerned about downside risks to margins and sales. 

Morgan Stanley (NYSE: MS) lowered its Treasury Wine share price target from $11.00 to $10.00. It lowered the price target but retains an overweight rating for now, albeit extremely cautious, because of the company’s balance sheet strength and pivot options. 

These Dividend Stocks Could Be Your Next Cash Kings (FREE REPORT)

Motley Fool Australia’s Dividend experts recently released a brand-new FREE report revealing 3 dividend stocks with JUICY franked dividends that could keep paying you meaty dividends for years to come.

Our team of investors think these 3 dividend stocks should be a ‘must consider’ for any savvy dividend investor. But more importantly, could potentially make Australian investors a heap of passive income.

Don’t miss out! Simply click the link below to grab your free copy and discover these 3 high conviction stocks now.

Click Here For Your Free Stock Report

Returns As of 6th October 2020

More reading

Motley Fool contributor Lina Lim 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. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

The post What big brokers think of the Treasury Wine (ASX:TWE) share price now appeared first on Motley Fool Australia.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!