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

IGA, may distribute information/research produced by its respective foreign affiliates within the IG Group of companies pursuant to an arrangement under Regulation 32C of the Financial Advisers Regulations. Where the research is distributed in Singapore to a person who is not an Accredited Investor, Expert Investor or an Institutional Investor, IGA accepts legal responsibility for the contents of the report to such persons only to the extent required by law. Singapore recipients should contact IGA at 6390 5118 for matters arising from, or in connection with the information distributed.

The information/research herein is prepared by IG Asia Pte Ltd (IGA) and its foreign affiliated companies (collectively known as the IG Group) and is intended for general circulation only. It does not take into account the specific investment objectives, financial situation, or particular needs of any particular person. You should take into account your specific investment objectives, financial situation, and particular needs before making a commitment to trade, including seeking advice from an independent financial adviser regarding the suitability of the investment, under a separate engagement, as you deem fit.

Please see important Research Disclaimer.

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
Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sell
Buy
Updated
Change

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.

Sell
Buy
Updated
Change
-
-
-
-
-
-
-
-
-
-
-
-
China 300
-
-
-
-

Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 20 mins.

The Momentum Report

Get the week’s momentum report sent directly to your inbox every Monday for FREE. The Week Ahead gives you a full calendar of upcoming key events to monitor in the coming week, as well as commentary and insight from our expert analysts on the major indices to watch.

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.