Why has the Treasury Wine (ASX:TWE) share price surged 10% in a month?

Let's take a look at why the global wine company's share price is bubbling this month?

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Key points
  • The Treasury Wine share price has surged almost 10% in a month 
  • The wine giant's shares exploded on the back of the company's half year results 
  • Despite this, the company's shares are down nearly 6% year to date 

The Treasury Wine Estates Ltd (ASX: TWE) share price has made significant ground this month.

The company's shares have surged nearly 10% from market close on 14 February. The Treasury Wine share price is currently trading at $11.69, up 1.3% on Friday's close.

Let's take a look at what is happening at Treasury Wine.

Group of people toasting with wine

Image source: Getty Images

Treasury Wine share price surges ahead

The Treasury Wine share price has turned its fortunes around in the past month after a tough start to the year. The wine giant's share price fell nearly 15% between market close on 31 December 2021 and 15 February 2022 before picking up again.

On 16 February, Treasury Wine shares surged nearly 12% on the back of the company's financial results. Despite a 7.5% drop in net profit and a 6.7% fall in EBITS, the company expressed optimism on its future outlook.

Commenting on this future agenda, chief executive officer Tim Ford said:

We have great confidence that by leveraging the unique strengths of our business – our people, our brands and our asset base – we are well placed to capitalise on the significant opportunities across the global markets in which we operate.

Treasury Wines shares dropped 2.74% on March 2. This was ex-dividend day for the company, as my Foolish colleague Aaron reported. The board maintained a fully-franked interim dividend of 15 cents per share. This will be paid on 1 April.

Morgans recently recommended Treasury Wine as an "add" with a $13.93 price target. That's 19% more than the current share price.

The broker said:

The foundations are now in place for TWE to deliver strong double digit growth from the 2H22 over the next few years. Trading at a material discount to our valuation and other luxury brand owners, TWE is a key pick for us.

Share price snapshot

The Treasury Wine Estates share price has leapt nearly 5% in the past year, although it is down nearly 6% year to date.

For perspective, the S&P/ASX 200 Index (ASX: XJO) has returned around 5.5% in the past year.

Treasury Wine has a market capitalisation of about $8.4 billion based on its current share price.

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