Treasury Wines (ASX:TWE) share price lifts amid media speculation

The Treasury Wine Estates Ltd (ASX: TWE) share price has edged higher after responding to media speculation about its operational plans.

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Treasury Wine Estates Ltd (ASX: TWE) share price has edged higher after an early morning announcement.

Shares in the Aussie wine maker and distributor are 0.25% higher at $10 in early trade after the company response to ongoing media speculation around a potential demerger.

three building blocks with smiley faces, indicating a rise in the ASX share price

Image source: Getty Images

What's happening?

There has been intense speculation in recent months regarding a demerger of one of Treasury Wines' most recognisable brands. The group's premium Penfolds wine label was rumoured to be under review by Penfolds.

That includes suggestions in a 7 February article in The Australian that Treasury Wines was investigating a demerger of its global operations into three separate businesses.

However, today's announcement has provided some further context for shareholders. Treasury Wines confirmed that it has "formally paused work on a potential demerger of its Penfolds brand", as noted at its November annual general meeting.

Treasury Wines is "not currently considering a demerger of any brands/businesses within its portfolio", the company added. The company continues to assess internal operating models to deliver "long term value". That includes "separating focus across its brand portfolios" which hints that there could be more changes to come.

The Treasury Wines share price has lifted slightly on the news in early trade. That comes as the S&P/ASX 200 Index (ASX: XJO) edges 0.3% higher to start the week's trade.

How has the Treasury Wines share price performed recently?

The Treasury Wines share price has been under pressure in the last 12 months. The coronavirus pandemic and March 2020 bear market saw the company's value plummet lower.
That broad market weakness was compounded by ongoing trade tensions with China.

China is a major wine purchaser and a lucrative market for Treasury Wines, including its Penfolds brand. However, there has been rising concerns over counterfeit labels and increasing tariffs for Aussie wines.

That has seen shares in the Aussie wine group slump 15.3% in the last 12 months.

Motley Fool contributor Ken Hall has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

More on Share Market News

Happy young woman saving money in a piggy bank.
Broker Notes

Up more than 17% since January, should you buy CBA shares today?

A leading analyst delivers his forecast for CBA’s fast-rising shares.

Read more »

A woman leans forward with her hands shielding her eyes as if she is looking intently for something.
Growth Shares

5 ASX shares I'd buy with $5,000 today

These shares are on my radar right now.

Read more »

A man rests his chin in his hands, pondering what is the answer?
Opinions

Is that the end of the ASX share market crash?

The stock market looks like it has started to recover.

Read more »

Frustrated man at computer desk.
Share Market News

5 most traded ASX 200 shares since the war began

Only one of them is an energy stock.

Read more »

A man holding a cup of coffee puts his thumb up and smiles while at laptop.
Opinions

3 reasons to buy NAB shares today

Here's why I think the ASX bank stock is still a buy.

Read more »

Excited couple celebrating success while looking at smartphone.
Broker Notes

Up 222% in a year, why this ASX energy share is forecast to more than double your money again

A leading broker forecasts more outsized gains to come from this rocketing ASX energy share. But why?

Read more »

A man holds his head in his hands after seeing bad news on his laptop screen.
Broker Notes

3 massively popular ASX 200 shares experts say to sell (inc. CBA)

Let's see why they are bearish on these names this week.

Read more »

Two workers working with a large copper coil in a factory.
Broker Notes

Should you buy this $8 billion ASX 200 copper stock amid surging global demand?

A leading analyst drills into the outlook for this $8 billion ASX copper miner.

Read more »