Potential Penfolds Demerger Offers Options for Treasury Wine Investors, but Also Cost; FVE Unchanged

Treasury Wine Estates will accelerate the restructure of its commercial wine offering in the United States and look to potentially spin out its crown jewel Penfolds-branded wines by the end of calendar 2021. We’ve adjusted our near-term forecasts to account for lower U.S. commercial wine volumes and greater negative COVID-19 impacts, but these are offset over the long term by a post-coronavirus rebound in fiscal 2021 and improved American profitability. We maintain our AUD 12.80 per share fair value estimate.