The Treasury Wine Estates Ltd (ASX: TWE) share price will be one to watch in August when it releases its full year results.
With the wine company’s shares down 44% from their 52-week high, shareholders will no doubt be hoping a better than expected result will get its shares heading back in the right direction.
What is the market expecting from Treasury Wine?
Ahead of the release of the Treasury Wine full year result on 13 August, I thought I would take a look to see what the market is expecting from it.
According to a note out of Goldman Sachs, it is forecasting group sales of $2,646.9 million in FY 2020.
This is slightly ahead of the analyst consensus estimate of $2,620.4 million and down 6.5% from FY 2019’s group sales of $2,831.6 million.
The broker expects this to be driven by volume declines across much of the business and offset slightly by increases in average revenue per case.
In respect to earnings, the broker is forecasting EBITS of $538.1 million for FY 2020. While this is 1.4% higher than the consensus estimate of $530.8 million, it will be a 21% reduction on FY 2019’s $681.4 million.
The Americas segment is expected to be the main drag on its earnings this year. Goldman is forecasting a 36.9% decline in Americas EBITS to $147.4 million in FY 2020.
Will there be a dividend?
Both Goldman Sachs and the market are expecting Treasury Wine to pay its shareholders a final dividend, albeit a heavily reduced one.
Goldman estimates that the company will declare a 7 cents per share fully franked final dividend. Whereas the consensus estimate is for a final dividend of 8 cents per share. This is down from 20 cents per share from the prior corresponding period.
Should you invest?
While I think that Treasury Wine could be a good long term investment option for patient investors, Goldman Sachs is sitting on the fence.
It has reiterated its neutral rating and $10.10 price target on Treasury Wine’s shares.
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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Treasury Wine Estates Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.
The post Earnings season: What to expect from Treasury Wine Estates appeared first on Motley Fool Australia.
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