ASX:TWE

Stock Analysis Report

Executive Summary

Treasury Wine Estates Limited operates as a wine company in Australia, New Zealand, Asia, Europe, and the Americas.

Snowflake

Fundamentals

Excellent balance sheet with proven track record.


Similar Companies

Share Price & News

How has Treasury Wine Estates's share price performed over time and what events caused price changes?


Latest Share Price and Events


Market Performance


7 Day Return

5.8%

TWE

0.7%

AU Beverage

0.7%

AU Market


1 Year Return

12.6%

TWE

10.1%

AU Beverage

11.0%

AU Market

Return vs Industry: TWE exceeded the Australian Beverage industry which returned 10.1% over the past year.

Return vs Market: TWE exceeded the Australian Market which returned 11% over the past year.


Shareholder returns

TWEIndustryMarket
7 Day5.8%0.7%0.7%
30 Day2.9%-2.4%-0.2%
90 Day16.4%8.0%-0.1%
1 Year15.2%12.6%13.9%10.1%17.4%11.0%
3 Year74.8%64.7%44.3%30.6%36.3%18.0%
5 Year389.3%327.1%163.7%114.3%51.4%17.3%

Price Volatility Vs. Market

How volatile is Treasury Wine Estates's share price compared to the market and industry in the last 5 years?


Simply Wall St News

Valuation

Is Treasury Wine Estates undervalued compared to its fair value and its price relative to the market?

20.3%

Undervalued compared to fair value


Share Price vs. Fair Value

Undervalued: TWE (A$18.3) is trading below our estimate of fair value (A$23.75)

Significantly Undervalued: TWE is trading below fair value, but not by a significant amount.


Price To Earnings Ratio

PE vs Industry: TWE is poor value based on its PE Ratio (31.3x) compared to the Beverage industry average (27x).

PE vs Market: TWE is poor value based on its PE Ratio (31.3x) compared to the Australian market (17.7x).


Price to Earnings Growth Ratio

Low PEG Ratio: TWE is poor value based on its PEG Ratio (1.8x)


Price to Book Ratio

PB vs Industry: TWE is overvalued based on its PB Ratio (3.5x) compared to the AU Beverage industry average (2x).


Next Steps

Future Growth

How is Treasury Wine Estates forecast to perform in the next 1 to 3 years based on estimates from 12 analysts?

17.9%

Forecasted annual earnings growth


Earnings and Revenue Growth Forecasts


Analyst Future Growth Forecasts

Earnings vs Savings Rate: TWE's forecast earnings growth (17.9% per year) is above the savings rate (2.3%).

Earnings vs Market: TWE's earnings (17.9% per year) are forecast to grow faster than the Australian market (10.2% per year).

High Growth Earnings: TWE's earnings are forecast to grow, but not significantly.

Revenue vs Market: TWE's revenue (10% per year) is forecast to grow faster than the Australian market (3.6% per year).

High Growth Revenue: TWE's revenue (10% per year) is forecast to grow slower than 20% per year.


Earnings per Share Growth Forecasts


Future Return on Equity

High Future ROE: TWE's Return on Equity is forecast to be low in 3 years time (16.8%).


Next Steps

Past Performance

How has Treasury Wine Estates performed over the past 5 years?

49.0%

Historical annual earnings growth


Earnings and Revenue History


Past Earnings Growth Analysis

Earnings Trend: TWE has become profitable over the past 5 years, growing earnings by 49% per year.

Accelerating Growth: TWE's earnings growth over the past year (16.4%) is below its 5-year average (49% per year).

Earnings vs Industry: TWE earnings growth over the past year (16.4%) exceeded the Beverage industry 11%.


Return on Equity

High ROE: TWE's Return on Equity (11.3%) is considered low.


Return on Assets

ROA vs Industry: TWE has a higher Return on Assets than the Beverage industry average last year.


Return on Capital Employed

ROCE Improving: TWE has significantly improved its Return on Capital Employed over the past 3 years.


Next Steps

Financial Health

How is Treasury Wine Estates's financial position?


Financial Position Analysis

Short Term Liabilities: TWE's short term assets (A$2.2B) exceeds its short term liabilities (A$885.0M)

Long Term Liabilities: TWE's short term assets (2.2B) exceeds its long term liabilities (1.4B)


Debt to Equity History and Analysis

Debt Level: TWE's debt to equity ratio (31.4%) is considered satisfactory

Reducing Debt: TWE's debt to equity ratio has increased from 9.3% to 31.4% over the past 5 years.

Debt Coverage: TWE's debt is well covered by operating cash flow (35.7%).

Interest Coverage: TWE's interest payments on its debt are well covered by EBIT (12.9x coverage).


Balance Sheet

Inventory Level: TWE has a high level of physical assets or inventory.

Debt Coverage by Assets: TWE's debt is covered by short term assets (assets are 1.861290x debt).


Next Steps

Dividend

What is Treasury Wine Estates's current dividend yield, its reliability and sustainability?

2.11%

Current Dividend Yield


Dividend Yield vs Market

company2.1%marketbottom25%2.5%markettop25%5.6%industryaverage3.0%forecastin3Years2.9%

Current dividend yield vs market & industry


Stability and Growth of Payments

Notable Dividend: TWE's dividend (2.19%) isn’t notable compared to the bottom 25% of dividend payers in the Australian market (2.49%).

High Dividend: TWE's dividend (2.19%) is low compared to the top 25% of dividend payers in the Australian market (5.56%).

Stable Dividend: Whilst dividend payments have been stable, TWE has been paying a dividend for less than 10 years.

Growing Dividend: TWE's dividend payments have increased, but the company has only paid a dividend for 8 years.


Current Payout to Shareholders

Dividend Coverage: With its reasonable payout ratio (65.1%), TWE's dividend payments are covered by earnings.


Future Payout to Shareholders

Future Dividend Coverage: TWE's dividends in 3 years are forecast to be covered by earnings (63% payout ratio).


Next Steps

Management

What is the CEO of Treasury Wine Estates's salary, the management and board of directors tenure and is there insider trading?

1.8yrs

Average management tenure


CEO

Mike Clarke (54yo)

5.6yrs

Tenure

AU$11,387,045

Compensation

Mr. Michael A. Clarke, also known as Mike, CA, B.Com, has been the Chief Executive Officer and Managing Director of Treasury Wine Estates Limited since March 31, 2014. Mr. Clarke served as the Chief Execut ...


CEO Compensation Analysis

Compensation vs. Market: Mike's total compensation ($USD7.70M) is about average for companies of similar size in the Australian market ($USD2.79M).

Compensation vs Earnings: Mike's compensation has been consistent with company performance over the past year.


Management Age and Tenure

1.8yrs

Average Tenure

Experienced Management: TWE's management team is not considered experienced ( 1.8 years average tenure), which suggests a new team.


Board Age and Tenure

5.6yrs

Average Tenure

56yo

Average Age

Experienced Board: TWE's board of directors are considered experienced (5.6 years average tenure).


Insider Trading

Insider Buying: TWE insiders have sold more shares than they have bought in the past 3 months.


Recent Insider Transactions

SellAU$641,12609 Sep 19
Michael Clarke
EntityIndividual
Role
Chief Executive Officer
CEO, MD & Director
Shares34,012
Max PriceAU$18.85
BuyAU$2,26405 Sep 19
Michael Clarke
EntityIndividual
Role
Chief Executive Officer
CEO, MD & Director
Shares120
Max PriceAU$18.87
SellAU$3,605,32918 Aug 19
Michael Clarke
EntityIndividual
Role
Chief Executive Officer
CEO, MD & Director
Shares212,537
Max PriceAU$16.96
SellAU$6,904,66007 May 19
Michael Clarke
EntityIndividual
Role
Chief Executive Officer
CEO, MD & Director
Shares400,000
Max PriceAU$17.26
BuyAU$363,081,71925 Apr 19
BlackRock, Inc.
EntityCompany
Shares18,533,668
Max PriceAU$19.77
SellAU$276,800,65925 Apr 19
BlackRock, Inc.
EntityCompany
Shares14,475,585
Max PriceAU$19.74
BuyAU$113,595,79520 Mar 19
Capital Research and Management Company
EntityCompany
Shares7,309,897
Max PriceAU$15.54
BuyAU$1,82711 Mar 19
Michael Clarke
EntityIndividual
Role
Chief Executive Officer
CEO, MD & Director
Shares119
Max PriceAU$15.35
BuyAU$204,470,54108 Mar 19
Capital Research and Management Company
EntityCompany
Shares13,217,230
Max PriceAU$15.47
SellAU$46,603,43824 Feb 19
Wellington Management Group LLP
EntityCompany
Shares3,143,059
Max PriceAU$14.83
BuyAU$246,45017 Feb 19
Garry Hounsell
EntityIndividual
Role
Member of the Board of Directors
Non-Executive Director
Shares15,000
Max PriceAU$16.43
BuyAU$30,431,18606 Dec 18
The Vanguard Group, Inc.
EntityCompany
Shares1,557,265
Max PriceAU$19.69
SellAU$6,304,23606 Dec 18
The Vanguard Group, Inc.
EntityCompany
Shares322,238
Max PriceAU$19.61
BuyAU$162,61026 Nov 18
Paul Rayner
EntityIndividual
Role
Chairman of the Board
Chairman
Shares11,500
Max PriceAU$14.14
BuyAU$90807 Nov 18
Michael Clarke
EntityIndividual
Role
Chief Executive Officer
CEO, MD & Director
Shares58
Max PriceAU$15.66
SellAU$137,374,58731 Oct 18
Capital Research and Management Company
EntityCompany
Shares8,875,302
Max PriceAU$15.48

Ownership Breakdown


Management Team

  • Mike Clarke (54yo)

    CEO, MD & Director

    • Tenure: 5.6yrs
    • Compensation: AU$11.39m
  • Angus G. McPherson

    President of Americas & Global Sales

    • Tenure: 0.2yrs
    • Compensation: AU$1.33m
  • Fiona Last

    Company Secretary

    • Tenure: 3.1yrs
  • Linnsey Caya

    Chief People & Legal Officer

    • Tenure: 3.1yrs
  • Tim Ford

    Chief Operating Officer

    • Tenure: 0.8yrs
    • Compensation: AU$1.01m
  • Matt Young

    Chief Financial Officer

    • Tenure: 1.4yrs
    • Compensation: AU$1.36m
  • Tom King

    Managing Director of North Asia

    • Tenure: 2.6yrs
  • Angus Lilley

    Chief Marketing Officer

    • Tenure: 0.8yrs
  • Peter Neilson

    Managing Director of Australia & New Zealand

    • Tenure: 1.8yrs
  • Kristy Keyte

    Global Marketing Director of Penfolds

    • Tenure: 0yrs

Board Members

  • Warwick Every-Burns (66yo)

    Non-Executive Director

    • Tenure: 8.4yrs
    • Compensation: AU$240.65k
  • Paul Rayner (65yo)

    Chairman

    • Tenure: 7.1yrs
    • Compensation: AU$532.84k
  • Lauri Shanahan (56yo)

    Non-Executive Director

    • Tenure: 2.9yrs
    • Compensation: AU$212.84k
  • Mike Clarke (54yo)

    CEO, MD & Director

    • Tenure: 5.6yrs
    • Compensation: AU$11.39m
  • Garry Hounsell (64yo)

    Non-Executive Director

    • Tenure: 7.1yrs
    • Compensation: AU$255.69k
  • Louisa Cheang (55yo)

    Independent Non-Executive Director

    • Tenure: 0.8yrs
    • Compensation: AU$111.96k
  • Colleen Jay (56yo)

    Independent Non-Executive Director

    • Tenure: 1.5yrs
    • Compensation: AU$213.19k
  • Ed Chan (56yo)

    Independent Non-Executive Director

    • Tenure: 7.1yrs
    • Compensation: AU$213.19k
  • Michelle Brampton

    Director

    • Tenure: 0.4yrs

Company Information

Treasury Wine Estates Limited's company bio, employee growth, exchange listings and data sources


Key Information

  • Name: Treasury Wine Estates Limited
  • Ticker: TWE
  • Exchange: ASX
  • Founded: 1843
  • Industry: Distillers and Vintners
  • Sector: Food, Beverage & Tobacco
  • Market Cap: AU$13.153b
  • Shares outstanding: 718.75m
  • Website: https://www.tweglobal.com

Number of Employees


Location

  • Treasury Wine Estates Limited
  • 161 Collins Street
  • Level 8
  • Melbourne
  • Victoria
  • 3000
  • Australia

Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
TWEASX (Australian Securities Exchange)YesOrdinary SharesAUAUDMay 2011
TSRY.FOTCPK (Pink Sheets LLC)YesOrdinary SharesUSUSDMay 2011
T7WDB (Deutsche Boerse AG)YesOrdinary SharesDEEURMay 2011
TWECHIA (Chi-X Australia)YesOrdinary SharesAUAUDMay 2011
TSRY.YOTCPK (Pink Sheets LLC)SPONSORED ADRUSUSDMay 2011

Biography

Treasury Wine Estates Limited operates as a wine company in Australia, New Zealand, Asia, Europe, and the Americas. It engages in the viticulture and winemaking; and marketing, sale, and distribution of wi ...


Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2019/10/16 10:34
End of Day Share Price2019/10/16 00:00
Earnings2019/06/30
Annual Earnings2019/06/30


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.