Treasury Wine Estates (ASX:TWE) is undervalued, with potential for a re-rating driven by a growing luxury portfolio, an evolving capital structure, and strong earnings per share compound annual growth forecasts of 14% over the next three years, Jarden Research said in a Jan. 30 note.
Jarden remains optimistic about the growth potential of the company's Daou and Franks brands in the Americas.
However, the Matua and 19 Crimes brands are likely to face continued challenges, Jarden added.
Despite these headwinds, Jarden believes the overall earnings outlook for TWE remains solid and the weaker Australian Dollar should provide near-term support to earnings.
Jarden Research maintained the company's buy rating but raised its price target to AU$14.70 from AU$14.10.