TWE – UBS rates the stock as Neutral

Treasury Wine Estates has entered into a long-term licensing agreement with The Wine Group under which the latter can source and sell selected Beringer brands in the Americas for circa $100m.

UBS is of the view the agreement marks a key step in Treasury Wine’s $300m wine divesture plans over 2021(almost $157m of which stand completed), with an aim of circa $197m in operating income as a baseline with margins of almost 25%.

The deal is consistent with Treasury Wine’s intentions and increases UBS’s confidence in the company’s ability to pivot to a lower volume/higher-margin business.

UBS retains a Neutral rating, which remains under review with a target of $10.60.

Sector: Food, Beverage & Tobacco.

 

Target price is $10.60.Current Price is $11.42. Difference: ($0.82) – (brackets indicate current price is over target). If TWE meets the UBS target it will return approximately -8% (excluding dividends, fees and charges – negative figures indicate an expected loss).

 

 

About Broker News

FNArena's Australian Broker Call, is your daily news report on the latest recommendation, valuation, forecast and opinions recently published by Stockbrokers.

View more articles by Broker News →