The Treasury Wine Estates Ltd (ASX: TWE) share price has been a strong performer in 2021.
Since the start of the year, the wine company's shares have risen almost 24%.
This is more than double the return of the S&P/ASX 200 Index (ASX: XJO) over the same period.
Can the Treasury Wine share price rise further?
The good news is that one leading broker doesn't believe it is too late to buy Treasury Wine's shares.
According to a note out of Morgans, its analysts have retained their add rating and lifted their price target on the company's shares to $14.06.
Based on the current Treasury Wine share price, this implies potential upside of approximately 19% over the next 12 months.
What did the broker say?
Morgans notes that Treasury Wine has recently announced the acquisition of Napa Valley-based luxury wine business, Frank Family Vineyards (FFV) for US$315 million (A$432 million). The broker is a fan of the deal and expects it fill a key gap in its portfolio and support margin expansion.
Its analysts commented: "The acquisition is in line with Treasury Americas strategy and will strengthen a key gap in its chardonnay portfolio. Importantly, FFV has generated solid earnings growth over many years and is a high margin business. It should see TWE achieve its margin target two years earlier than planned. The acquisition is immediately EPS accretive and US$5m of cost synergies are expected by FY24."
This has ultimately led to Morgans upgrading its earnings forecasts and price target on the Treasury Wine share price accordingly.
Morgans concluded: "We have upgraded our forecasts, believing that the strategies TWE has in place will deliver solid earnings growth over coming years. We see recent share price weakness as a great buying opportunity in this high quality company. Add maintained."
