Formerly the wine division of international brewing company Fosters, and with its headquarters in Melbourne, Treasury Wine Estates (TWE) is an Australian global winemaking and distribution business. Raymond Chan explains why he likes TWE.
“Unsurprisingly, COVID has continued to impact some of Treasury Wine’s (TWE) key channels, particularly the higher-margin ones,” Raymond said.
“However, with key markets starting to reopen, we expect sales to improve from here.
“We also highlight that TWE is performing well in what it can control and in markets not impacted by COVID.
“TWE reiterated its medium-term growth targets – sustainable top-line growth, high single-digit earnings growth per annum, materially higher margins and return on capital employed (ROCE).
“The new divisional operating model is already seeing tangible signs of improvement across the brands.
“We continue to believe that this structure will achieve demerger type benefits without the additional costs.
“It also allows the market to properly value the iconic Penfolds brand.
“We believe the strategies TWE has in place will deliver solid earnings growth over [the] coming years.
“Recent share price weakness represents a great buying opportunity in this high-quality company,” Raymond concluded.
Treasury Wine Estates (TWE)
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