Treasury Wine Estates Ltd (ASX: TWE) shares are climbing higher into the green in morning trade on Wednesday.
At the time of writing, the shares are up around 0.5% and changing hands for $4.72 a piece.
The latest increase represents around a 39% rebound from a 12-year low recorded in late-March. It's certainly a step in the right direction, but there is still some way before Treasury Wine Estates can recover losses shed through 2025.
For the year to date, the shares are down around 11% and are 41% lower than this time last year.
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Why are Treasury Wine Estates shares rebounding?
After hitting the lowest trading value in over a decade in late-March, Treasury Wine Estates shares finally started rebounding after news that the company had begun trading below what its assets are worth.
The update encouraged bargain-hunting investors to step in while the shares were trading below fair value.
The rebound picked up pace in late-April when the company announced it is transitioning to a new regional operating model to help improve efficiency.
The move is part of TWE Ascent, Treasury Wine's global transformation program, which is intended to address the headwinds of recent years and position the business for sustainable growth.
The ASX 200 wine stock will switch to the new regional operating model as of the 1st of October. This will see the company operate four regional divisions. These include, the Americas, ANZ (Australia and New Zealand) combined with Europe, Greater China, and the emerging markets (Rest of Asia, Middle East, and Africa).
Treasury Wine Estates shares climbed even higher in early June. The increase followed an investor day update where the company unveiled its latest turnaround strategy. The transformation plan is expected to help simplify the business and help restore earnings growth.
Key updates included a sharper focus on Treasury Wine's strongest brands, a review of its Americas business, and plans to target $100 million per year in cost reductions. These cost reductions are expected to be fully realised by FY29.
Management also confirmed FY26 EBITS guidance in the range of $480 million to $490 million.
For FY27, management then expects EBITS to be at least equivalent to FY26 while the company continues to rebalance customer inventory levels in China and the United States.
Investors have been thrilled with the company's developments over the past three months. The renewed confidence has helped push the shares higher and higher.
What do brokers tip next? Can the shares keep climbing higher?
If broker sentiment is anything to go by, we could see a lot more from Treasury Wine Estates shares this year.
Market Index shows a buy consensus for the shares. And the average $5.20 target price implies a potential 11% upside, at the time of writing.
TradingView data shows that some are even more bullish. Out of 15 analysts, seven have a buy or strong buy rating. Another eight rate the ASX wine stock as a hold.
The average $5.34 target price implies a potential 15% upside ahead, at the time of writing. Meanwhile, the maximum $6.50 target price implies that the shares have the potential to jump another 40% higher over the next 12 months.
