The Treasury Wine Estates Ltd (ASX: TWE) share price has been on the up-and-up this year.
It has gained 9.04% year to date to trade at $13.63 at the time of writing.
Could the wine maker and marketer continue on its upwards trajectory? These experts see more blue skies ahead for the previously embattled S&P/ASX 200 Index (ASX: XJO) favourite.
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Is the future bright for the Treasury Wine share price?
Treasury Wine shares are among the top five overweight holdings in Perennial Partners' Perennial Value Australian Shares Trust.
The company – behind such beloved brands as Penfolds, Wolf Blass, and 19 Crimes – has bounced back from disastrous tariffs imposed by China in 2020 that effectively locked it out of the Chinese market.
Fortunately for long-term shareholders, the company's journey to recover lost earnings from the region has been successful. Its latest results noted that growth in global markets and channels improved so much as to mostly offset the earnings before interest and tax dint effectively imposed by the tariffs.
Additionally, the company has continued the premiumisation of its portfolio. Indeed, 83% of its global net sales revenue came from its premium and luxury portfolios in financial year 2022.
Perennial Partners' fund upped its holding in Treasury Wine shares last month amid the release of the company's earnings.
But it's the company's future margins and built-in inflation protection that it really likes. The fund's latest monthly report notes:
Given the long inventory cycle, wine margins are somewhat protected in inflationary environments.
Looking further ahead to [financial year 2024], earnings are expected to benefit from the lower grape costs in the 2021 and 2022 vintages.
And it's not alone in its bullish outlook.
Broker Morgans has slapped Treasury Wine shares with an add rating and a $15.71 price target, my Fool colleague James reports.
That represents a potential 15% upside for the ASX 200 stock.
