Now could be the time to pounce on Treasury Wine Estates Ltd (ASX: TWE) shares.
That's the view of analysts at Goldman Sachs, which believe the ASX 100 stock could rise strongly from current levels.
What is the broker saying about this ASX 100 stock?
Goldman Sachs has been looking into US wine sales trends using NielsenIQ scan data.
And while it acknowledges that NielsenIQ scan data only covers an estimated ~50% of retail sales in the US, with a skew towards chained retail channels, it believes it "does provide a trend and market share analysis relative to the covered channels."
Summarising the latest NielsenIQ scan data, the broker commented:
For the 4 weeks ending September 7th date, 2024, we note that the sales momentum in 19 Crimes was soft but improving at -10% YoY (vs -15% in previous 4wk update), offset by Matua +7%, FFV +7% and DAOU +5%. TWE US ex DAOU in total was -5% YoY vs US Wine Market -2% (-3% incl DAOU) a sequential improvement from previous 4 weeks with TWE US ex DAOU -9% (-7% incl DAOU) vs US Wine Market -1%.
For 19 Crimes, the improvement was largely driven by -5% (vs prev 4wk -15%) volume partially offset by -6% price YoY (vs prev 4wk +0%), which could suggest overall higher promotional pressure/negative mix.
Overall, this latest data has been somewhat mixed according to Goldman Sachs, it said:
We see the latest Nielsen data as mixed with last 4 wk trends in 19 Crimes showing modestly negative pricing and improved volume helping close the retail value market share losses vs previous update.
At a group level, we view this as a positive for overall TWE (ex DAOU) America performance with -3% (-5% vs -2% US retail wine market) retail market share loss for 4wk to Sep 7th vs 13th Jul and 10th Aug updates of -13% and -9% respectively.
That said, we do observe that DAOU YoY change continues to moderate over time with 4 wk update +5% YoY vs 12m average of +19%.
Big return potential
In response to the above, the broker has reaffirmed its buy rating and $15.20 price target on the ASX 100 stock.
Based on the current Treasury Wine share price of $11.23, this implies potential upside of 35% for investors over the next 12 months.
In addition, Goldman Sachs is expecting the wine giant's shares to provide investors with a 3.7% dividend yield in FY 2025.
