Will Treasury Wine Estates Improve With Age?
Will Treasury Wine Estates Improve With Age?
Dec 6, 2011 6
(WSJ) - Treasury Wine Estates may have outperformed the benchmark S&P/ASX200 index by 18.4% in the past six months but JPMorgan, Citi, Credit Suisse and Commonwealth Bank of Australia all reckon it’s better to be underweight.
Spun out in May from the now de-listed Foster’s Group, the company just became Australia’s largest listed alcohol company with a market capitalization of 2.5 billion Australian dollars (US$2.55 billion).
CBA analyst Jordan Rogers downgraded the stock to “sell” last Thursday, with a price target of A$3.50 citing its outperformance and domestic grape oversupply. The broker believes the company is unlikely to receive a bid higher than the A$2.3 to A$2.7 billion indicative non-binding bid from Cerberus Capital Management in September 2010 and thinks the risk of corporate activity is not reason enough to hold.
Comments