Treasury Wine Estates (ASX:TWE) is fundamentally "undervalued" but the multiple is well placed to re-rate on demand from China, anticipated commercial sales from the second half of 2025, and recovery in the US markets, Jarden Research said in a Dec.9 note.
On Tuesday, the company agreed to acquire 75% of Chinese firm Ningxia Stone & Moon Winery for 130 million yuan. Terms include an option for Treasury Wine Estates to acquire the remaining 25% ownership after five years.
A growing luxury portfolio, evolving capital structure with a potential demerger, and expected earnings per share growth also add to the possibility of re-rating Treasury Wine, the investment firm said.
On a sum-of-the-parts basis, Jarden sees scope for Treasury Wine Estates to trade well above AU$14 per share.
The investment firm maintained the company's buy rating and its target price of AU$14.10.
Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.