Why Treasury Wine Estates’ Share Price Rebounds 3.75%

After finishing almost 5% lower yesterday, Treasury Wine Estates Limited [ASX:TWE] has rebounded 4.037% today, or $0.575, and is currently trading at $14.82 per share.

What’s happened to Treasury Wine Estates’ share price?

Investors were quick to sell TWE yesterday morning after one of its rivals had released a disappointing trading update in the US.

Constellation Brands’ share price fell 12% after news of weak third quarter wine sales reached investors.

Investors appeared to believe TWE may also fall short of FY19 expectations, which put the share price into a nosedive.

Special 2019 report: The next generation of Aussie income super stars revealed. Hint: it’s not the banks. Click here to claim your copy now.

After trading closed yesterday, Treasury Wine Estates sought to alleviate any concerns about the company’s underperformance. In the announcement, TWC made assurances it was happy with trading performances across its operating regions and expects earnings above consensus estimates.

The current consensus EBITS is $332 million, with the company now forecasting EBITS within the range of $335 million to $340 million. TWE has given guidance of approximately 25% reported EBITS growth for fiscal 2019.

What’s next for Treasury Wine Estates

With its audited results for the first six months of fiscal 2019 due on 14 February 2019, TWE is on track to report an increase in total earnings.

However, despite the strong momentum in the wine market exhibited in China, Citibank suspects that the company’s sales will slow beyond FY19.

More to come.

Regards,

Ryan Clarkson-Ledward,
For Money Morning

PS: The growing Chinese middle class could translate into a massive investment opportunity for Australians. Get the details here.


Ryan Clarkson-Ledward is an Editor at Money Morning.

Ryan holds degrees in both communication and international business. He helps bring Money Morning readers the latest market updates, both locally and abroad. Ryan tackles all the issues investors need to know about that the mainstream media neglects.

Ryan is also the Editor of Australian Small-Cap Investigator, a stock tipping newsletter that hunts down promising small-cap stocks by dissecting the latest events affecting the world.

To find out more about the publications Ryan works on and how you can subscribe, please click on the corresponding link here:


Money Morning Australia