Why is the Treasury Wine (ASX:TWE) share price in the green today?

Are Treasury Wine investors popping a bottle after today’s gain?

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Group of people toasting with wine

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The Treasury Wine Estates Ltd (ASX: TWE) share price has broken its 4-day losing streak on Monday. At the end of the session, shares in the global wine company were trading 1.08% higher at $12.18 apiece.

Prior to today, the Treasury Wines share price had taken a 2.9% trim off the top during last week’s allotment of trading. Though, it appears investors were feeling more bullish on the wine label today. With no announcements from the company, we are left to take a look at what else might have shifted sentiment.

Cheers to freedom

Are you more of a ‘social drinker’? Not too fond of blowing the froth off a cold one at home, or popping a bottle for a party of one? Well, today marked the so-called ‘Freedom Day‘ for residents of New South Wales after a painstaking 107 days of tight restrictions. In response, people have taken the opportunity to go and experience social interaction again.

Simultaneously, things are looking positive for Victoria as it surpasses 61% of people over 16 years old being fully vaccinated. With the vaccination rate moving towards the Federal government’s 80% target for phase C, investors are beginning to look more fondly on consumer staples, such as Treasury Wines.

Importantly, as restaurants and bars are allowed to resume operations, the likelihood of increased sales to such businesses begins to improve.

Treasury Wines has navigated COVID-19 conditions throughout the past 18 months. At the end of June 2020, the company reported a profit of $250 million on revenue of $2.684 billion. Although, these figures remain down from pre-pandemic levels.

What analysts think of the Treasury Wines share price

A few weeks back, the team of analysts at Morgans retained their add rating on Treasury Wines. At the same time, the broker put a $14.01 price target on the company’s shares.

According to the note, the analysts believed the full-year result produced by Treasury Wines in FY21 was impressive given the headwinds. In addition, Morgans expect that the long-term growth story for the company remains intact.

Finally, the price target reflects a further potential 15% upside to the Treasury Wines share price. Other investors might be thinking the same based on today’s price action.

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Motley Fool contributor Mitchell Lawler has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. 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.

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