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Treasury Wine Estates Ltd (TWE) $12.15

TWE rallied +3.1% on Thursday as the winemaker moved from strength to strength following last week’s solid result, which contained no hidden surprises; in fact, it came in a touch above expectations following a beat on revenue. The narrative out of America wasn’t as bad as many feared, and hopes are gaining momentum that we will see a resolution around Chinese trade tariffs in the coming weeks. While the demand for “luxury wine” remains intact, TWE is well-positioned to surprise on the upside through 2024, especially if we hear positive news from Beijing.

The Global Times recently reported that Australian winemakers are adopting proactive strategies, including increasing shipments to China’s Hong Kong Special Administrative Region (HKSAR), in anticipation of the removal of tariffs on their products in the Chinese mainland – the claims were further supported by Reuters. This is clearly a bet that China will soon lift tariffs on Australian wine and revive a trade worth hundreds of millions of dollars, lets hope we’re not seeing the start of a “Buy the rumour and sell the fact trade”.

MM is long and bullish TWE
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Treasury Wine Estates Ltd (TWE)
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