China has announced temporary anti-dumping measures on Australian wine in the form of security deposits. Initial interpretation suggests an interim tariff of 169% for Treasury Wine’s exports.
This exceeds industry base case assumptions, Morgan Stanley observes and, at these levels, there is limited scope for continued exports to China via traditional channels.
The broker also notes downside risk in other markets as tariffs have been applied across the industry.
Overweight rating maintained with a target of $11. Industry view: Cautious.
Sector: Food, Beverage & Tobacco.
Target price is $11.00.Current Price is $9.23. Difference: $1.77 – (brackets indicate current price is over target). If TWE meets the Morgan Stanley target it will return approximately 16% (excluding dividends, fees and charges – negative figures indicate an expected loss).