Treasury Wine Estates Share Price Up 1.57% Amidst Top Broker’s Predictions

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The share price of global wine giant Treasury Wine Estates Ltd [ASX:TWE] is up by 1.57% at time of writing.

The ‘old-school’ growth stock has seemingly been on a permanent upward trajectory over the past decade, and has seen a sharp spike this morning on the ASX.

Related: Aussie stock picker, Sam Volkering (with gains as high as 1,431% in the last 18 months) reveals what he believes are his next four big potential winners.

What’s fuelling Treasury Wine Estates Share Price growth?

A short time ago the global winemaking and distribution business announced its half-year result and guidance for FY 2020.

Retail broker Morgans has forecast that on the back of these numbers, the company could generate strong returns for shareholders. The broker notes that its shares are trading at a discount to its medium-term forward PE ratio and believes that they could charge as much as 25% higher to $18.65.

Although Morgans has described the current environment as one of ‘abnormal markets,’ these positive estimates regarding TWE’s ability to deliver would have been well received by investors.

TWE is one of four major ASX stocks Morgans has recently publicly advocated as having the ability to prosper in the current market.

What does the future hold for Treasury Wine Estates?

Not everyone’s enamoured with the wine giant’s results.

Earlier in the month, analysts at Goldman Sachs continued to rate TWE shares as a sell, based on their understanding of the industry data.

Goldman noted, ‘the trends across TWE’s key markets remain generally subdued, although the net position has shown some improvement on the prior month’s data.

But it’s not clear that Goldman’s dubious recommendation will kill the buzz around the wine merchant’s forecast for strong double-digit multi-year earnings growth.

Due to the reported strength of overseas demand, the group is anticipating 25% EBITS (Earnings Before Tax and Interest) growth in FY 2019, and 15–20% in FY 2020.

If TWE delivers on this, this could be a great option for Aussie investors at the moment.

But as Morgans have indicated, the markets are very unpredictable right now and anything could happen next.

It pays to keep a cool, level head when dealing with contrary broker advice and figure out what your own experience with TWE is telling you. Oh, and your gut, of course — provided it’s not being influenced by a lovely glass of Penfolds!


Ryan Dinse,

For Money Morning

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About Ryan Clarkson-Ledward

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.

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