Treasury Wine shares jump as company sticks to earnings guidance
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More news: Shares in Treasury Wine Estates have jumped 6% to $12.08 in early trading on the ASX after Australia’s top winemaker reaffirmed its full-year guidance for mid-high single digit earnings growth, despite a challenging market.
Citi analysts maintained their 'Neutral' rating and $12.40 price target on the stock, saying they expect the market to take the reiteration of guidance "positively" given ongoing US wine market challenges.
Jarden analysts maintained their 'Overweight' rating and $14.50 price target on the stock.
What they said: Jarden analysts said: "The weakness in the broader US wine market is well understood. However, what we believe is less well understood is TWE's scale in, and exposure to, the more resilient luxury end of the market, which is evident in the data outlined in its US update".
Treasury Wine reaffirms FY earnings guidance
The news: Australia’s top winemaker Treasury Wine Estates has reaffirmed its full-year earnings guidance despite consumers feeling cost of living pressures.
The numbers: The group continues to expect mid-high single digit earnings growth for the full year, with earnings from the America’s business likely to be in the range of $223 million to $228 million, chief executive Tim Ford told investors in the US.
Growth expectations for its recently acquired Californian business, DAOU Vineyards, remain unchanged with earnings likely to be USD24 million ($36.1 million).
The context: Treasury, the maker of Penfolds, Wolf Blass and Lindemans, said it continued to see strong demand for luxury wine in key markets, even as cost of living pressures have weighed on consumers at the lower end of the market.
The winemaker, which gets three-quarters of its earnings from high-end wines like Penfolds, has pushed deeper into the premium segment with the acquisition of DAOU late last year.
It is also set to benefit from the reopening of the Chinese market earlier this year following the end of the tariffs on Australian wine.
The source: ASX announcement
