The Treasury Wine Estates Ltd (ASX: TWE) share price has been one of the best performers on the ASX 50 over the last 12 months.
During the period, the wine company's shares have risen 36%.
Image source: Getty Images
Where next for the Treasury Wine share price?
Given the strong performance by the Treasury Wine share price, investors may be wondering what's next.
The good news is that a couple of leading brokers still believe there's room for it to go higher from here.
For example, the team at Citi currently have a buy rating and $13.80 price target on the company's shares. This implies potential upside of 11% over the next 12 months.
In late December, Citi commented: "We attended the GFA 4Q21 update early today, which revealed on-premise and cellar door wine channels in the US are recovering, consistent with recent feedback from [rival] Duckhorn. This is a tailwind for Treasury Americas noting on-premise and cellar door are high margin channels contributing 19% of its NSR."
In light of the above, the broker is forecasting Treasury Americas first half earnings growth of 19% over the prior corresponding period.
Who else is bullish?
Another broker that is bullish on the Treasury Wine share price is Morgans. It currently has an add rating and $14.06 price target on its shares. This implies potential upside of 13% for investors in 2022.
While Morgans acknowledges that there are risks with its exit from China, it remains very positive on the future.
Morgans commented: "TWE has the China reallocation risk and it will take 2-3 years to recover these earnings in new markets. However once it comps China earnings, we expect TWE to deliver strong earnings growth from the 2H22 onwards. Organic growth will be supplemented by M&A."
In respect to the latter, the broker was pleased with the Frank Family Vineyards acquisition. Morgans sees it as a strategically important transaction.
It explained: "We view TWE's recent acquisition of Napa Valley luxury wine business, Frank Family Vineyards (FFV) as strategically important. This high margin business should see TWE achieve its US margin target two years earlier than planned."
Overall, the Treasury Wine share price could be destined to have another strong year if these brokers are on the money.
