Treasury Wine Estates Ltd (ASX: TWE) shares have been having a tough time in 2023.
Since the start of the year, the wine giant's shares have lost almost 20% of their value.
This leaves its shares trading within touching distance of their 52-week low.
Are Treasury Wine shares in the bargain bin?
While the weakness in the Treasury Wine share price this year has been disappointing, it could prove to be an excellent buying opportunity according to a number of brokers.
For example, no less than four top brokers currently have the equivalent of buy ratings on its shares. Here's a quick summary of their ratings:
- Goldman Sachs has a buy rating and a $14.20 price target
- Macquarie has an outperform rating and a $13.90 price target
- Morgan Stanley has an overweight rating and a $14.70 price target
- UBS has a buy rating and a $13.75 price target
These price targets imply a potential upside of 25% to 34% for Treasury Wine shares over the next 12 months from current levels. There are also healthy 3%+ dividend yields being forecast this year and next.
'Long-term moat'
Goldman Sachs thinks investors should be backing up the truck and buying the company's shares after its selloff this year. This is because it sees the recent pullback as an opportunity to buy a high-quality company with a long-term moat at a great price. It explains:
The current sell down represents a good opportunity to further accumulate a stock that has a long-term moat and global scalable upside, at 23x [now 20x] FY24 P/E with 12% FY22-25e CAGR. Reiterate Buy
Goldman also highlights that the market doesn't appear to be ascribing any value to a potential reopening of China. It adds:
We believe Penfolds is a valuable brand that has consumer equity and the current share price doesn't reflect China reopening upside.
