Morgan Stanley analyst Melinda Baxter maintained a Buy rating on Treasury Wine Estates Limited (TSRYF – Research Report) today and set a price target of A$12.90.
Melinda Baxter has given her Buy rating due to a combination of factors that suggest a favorable outlook for Treasury Wine Estates Limited. One significant factor is the minimal impact of US tariffs on the company’s operations, as the Treasury Americas division, which accounts for a substantial portion of the group’s earnings, primarily produces in the US. This insulation from tariffs on Australian and New Zealand exports positions the company advantageously in the current trade environment.
Additionally, the valuation of Treasury Wine Estates appears attractive, with the current share price aligning closely with Morgan Stanley’s forecasted net asset value. Despite the potential downside risk posed by a weaker US consumer, the company’s inventory position and estimated net realizable value support a robust valuation. Furthermore, the possibility of increased tariffs on European wine imports could benefit the company, given the significant portion of the US wine market that relies on imports. These factors collectively underpin Melinda Baxter’s positive outlook and Buy rating for the stock.
Baxter covers the Consumer Defensive sector, focusing on stocks such as Treasury Wine Estates Limited, Woolworths Group Ltd, and Coles Group Ltd.. According to TipRanks, Baxter has an average return of -7.0% and a 35.29% success rate on recommended stocks.