The Treasury Wine Estates Ltd (ASX: TWE) share price is down almost 2% in late afternoon trade on Monday.
Shares in the S&P/ASX 200 Index (ASX: XJO) global wine company closed last week trading for $13.68 each. They are currently swapping hands for $13.425 apiece.
That's today's price action for you.
Now, with the Treasury Wine share price still up 21% over the past year, we look at what could be another positive step for the wine company.
What positive steps is the company taking?
As The Australian Financial Review reports, Treasury Wine is ramping up its efforts to reduce costs in a restructure largely aimed at its budget wine offerings overseen by Treasury Premium Brands.
Wines selling for less than $15 are coming under the heaviest pressure as consumers feeling the pinch from stubbornly high inflation and ever-rising interest rates scale back.
The restructure will place more emphasis on the company's luxury wine segment, potentially offering a boost to the Treasury Wine share price down the road.
Rumours are circulating that 200 jobs may be on the line, though the company has not commented on any exact potential redundancy figures.
Commenting on the strategy that's intended to bolster the Treasury Wine share price, CEO Tim Ford said (as quoted by the AFR), "Like any business, we continually assess our structure and cost base to make sure we're in the right position to continue to deliver on our strategy."
Ford added:
We're now at the halfway point of our five-year strategy and faced with changing consumer preferences and economic uncertainty in major markets, we're reviewing the structure in our Treasury Premium Brands division, as well as some other parts of our business.
What else could impact the Treasury Wine share price?
ASX 200 investors are also keeping a close eye on any developments with the tariffs China imposed on Aussie wine exports in 2020.
Should the gradual thawing in relations between the Australian and Chinese governments lead to the removal of those tariffs, Treasury Wine would enjoy some healthy tailwinds.
Morgans counts among those with a bullish outlook for the wine company, saying it trades at a "material discount" to its peers.
The broker said Treasury Wine is well-positioned for "strong earnings growth … over the next few years".
Morgans has a $15.05 price target on the stock. That's 12% above the current Treasury Wine share price.
