More than $1.6 billion was wiped off the value of Treasury Wine Estates (TWE) shares yesterday after CEO, Michael Clarke sprang a major surprise in revealing he will retire from the top job at Australia’s biggest wine company next year.
Treasury Wine Estates CEO Michael Clarke has again held out the possibility of splitting the company into two parts - one to handle the low margin wines and the other its premium products, such as the Penfolds reds range.
Morgans assesses the investor briefing showcased the quality of management as well as the world-class viticultural assets. Vintages 2016-2019 are expected to underpin strong earnings growth out to FY22.
US retail sales data reveals the company has markedly improved sales in July. The improvement came with a strong launch of Beringer Bros. Credit Suisse is impressed with Treasury Wines' execution under the new distribution model.
Citi analysts are happy to stick with their Sell rating for Treasury Wines, as forecasts remain below market consensus and the greater risk, in the analysts' opinion, lays with the US wine market facing the prospect of over-supply.