Is It Too Late To Buy Treasury Wine Estates Limited (ASX:TWE)?
Treasury Wine Estates Limited (ASX:TWE) saw a double-digit share price rise of over 10% in the past couple of months on the ASX. With many analysts covering the large-cap stock, we may expect any price-sensitive announcements have already been factored into the stock’s share price. However, what if the stock is still a bargain? Let’s take a look at TWE’s outlook and value based on the most recent financial data to see if the opportunity still exists. See our latest analysis for TWE
Is TWE still cheap?
According to my valuation model, the stock is currently overvalued by about 57%, trading at A$15.71 compared to my intrinsic value of A$9.98. This means that the buying opportunity has probably disappeared for now. In addition to this, it seems like TWE’s share price is quite stable, which could mean two things: firstly, it may take the share price a while to fall back down to an attractive buying range, and secondly, there may be less chances to buy low in the future once it reaches that value. This is because TWE’s stock is less volatile than the wider market given its low beta.
What does the future of TWE look like?
Investors looking for growth in their portfolio may want to consider the prospects of a company before buying its shares. Buying a great company with a robust outlook at a cheap price is always a good investment, so let’s also take a look at TWE future expectations. With profit expected to grow by 96.91% over the next couple of years, the future seems bright for TWE. It looks like higher cash flows is on the cards for the stock, which should feed into a higher share valuation.
What this means for you:
Are you a shareholder? TWE’s optimistic future growth appears to have been factored into the current share price, with shares trading above its fair value. However, this brings up another question – is now the right time to sell? If you believe TWE should trade below its current price, selling high and buying it back up again when its price falls towards its real value can be profitable. But before you make this decision, take a look at whether its fundamentals have changed.
Are you a potential investor? If you’ve been keeping tabs on TWE for some time, now may not be the best time to enter into the stock. The price has surpassed its true value, which means there’s no upside from mispricing. However, the optimistic prospect is encouraging for TWE, which means it’s worth diving deeper into other factors in order to take advantage of the next price drop.
Price is just the tip of the iceberg. Dig deeper into what truly matters – the fundamentals – before you make a decision on Treasury Wine Estates. You can find everything you need to know about TWE in the latest infographic research report. If you are no longer interested in Treasury Wine Estates, you can use our free platform to see my list of over 50 other stocks with a high growth potential.
To help readers see pass the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned.
