Treasury Wine Estates share price: December wine export data in focus

Treasury's share price continues to slide, after the company guided for lower FY20 earnings last month.

Treasury Wine Estates share price: a bumpy road

It’s been a rough couple of weeks for Treasury Wine Estates (ASX: TWE).

All up, Treasury has now lost ~35% of its market value in less than a month.

Given the company’s exposure to the Chinese market (counting itself as the largest Australian wine exporter to China) – and the ongoing concerns around the Novel coronavirus – this steep and sustained share price sell-off should come as little surprise.

Indeed, investors have continued to abandon the stock: It fell as much as 3.57% today, to an intraday low of $11.35 per share a little after noon.

Treasury last traded around these price levels in early-2017.

Do you own Treasury shares? You can hedge your downside risk by trading CFDs now.

Wine data can’t revive confidence

The release of Q4 wine export data today – which highlighted a 13% increase in the value of Chinese exports and a 17% increase in the volume of exports during the quarter – wasn’t effective at reviving investor faith in TWE.

The picture for US wine exports was also weak: with the value of US wine exports declining 1% and export volume dropping an even more significant 14%, during Q4. This was attributable to an increase in competition.

All up, Australian wine exports increased 3% in CY19, hitting $2.91 billion, on a value basis.

Looking at premium wine exports, though Morgan Stanley noted that 'growth was strong in high end wine [...] where TWE is more prominent,’ such growth, remains offset against two key risks, including: the potential for further guidance downgrades off the back of the coronavirus threat and ‘management turnover’ risk.

Though aware of such risks, Morgan Stanley’s price target of $15.00 per share does imply some upside potential for Treasury investors at current price levels.

Macquarie, more bearish than Morgan Stanley, said, 'we note that the impact of coronavirus on tourism and consumption was not factored into TWE's recent downgrade and potentially has a further negative impact on volumes if it persists.'

Macquarie currently has a price target of $13.3 on TWE.

Speaking to the broad impact on Australia’s wine industry, Wine Australia today noted:

‘Looking ahead into 2020, we anticipate that coronavirus will have an impact on sales, particularly to China, but at this stage it is difficult to predict the degree of that impact.

Practise trading Australian stocks with an IG demo account now


This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

Seize a share opportunity today

Go long or short on thousands of international stocks.

  • Increase your market exposure with leverage
  • Get spreads from just 0.1% on major global shares
  • Trade CFDs straight into order books with direct market access

Live prices on most popular markets

  • Forex
  • Shares
  • Indices
liveprices.javascriptrequired
liveprices.javascriptrequired
liveprices.javascriptrequired

You might be interested in…

Find out what charges your trades could incur with our transparent fee structure.

Discover why so many clients choose us, and what makes us a world-leading provider of CFDs.

Stay on top of upcoming market-moving events with our customisable economic calendar.