The Treasury Wine Estates Ltd (ASX: TWE) share price was sold off last week.
The release of softer than expected guidance weighed heavily on the wine giantâs shares.
This led to the ASX 200 share losing over 11% of its value during the period.
Time to buy this ASX 200 share?
According to a note out of Goldman Sachs, its analysts think that investors should be scrambling to buy the companyâs shares before they rebound.
The note reveals that its analysts have responded to the trading update by reiterating their buy rating with a trimmed price target of $14.20.
Based on the current Treasury Wine share price of $11.76, this implies potential upside of 21% for investors over the next 12 months.
In addition, the broker is forecasting dividend yields of approximately 3% in FY 2023 and FY 2024, sweetening the deal further.
Why is Goldman staying positive?
Goldman believes that investors have been given a rare opportunity to buy a company with a long-term moat at an attractive price.
It also feels that the potential reopening of China to Australian wine is not reflected in the valuation of this ASX 200 share either. The broker explains:
We believe Penfolds is a valuable brand that has consumer equity and the current share price doesnât reflect China reopening upside. Additionally, we calculate capacity to execute ~A$150-400mn of capital management (up to 5%). The current sell down represents a good opportunity to further accumulate a stock that has a long-term moat and global scalable upside, at 23x FY24 P/E with 12% FY22-25e CAGR. Reiterate Buy.
All in all, this could make Treasury Wine an ASX 200 share to consider right now if you are on the lookout for some new portfolio additions.
