It was just over a month ago that TWE shares were hammered from $20.00 down to $15.60 in just a matter of days.
The catalyst for the 20% drop was a report that TWE’s business model had caused a glut of lower grade wines in China and the local franchisees were not happy.
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However, CEO Mike Clarke was quick to step in and stridently defend the company’s distribution structure and future earnings trajectory.
So far this year, earnings in Asia are up 48% to $117 million, 8% in North America to $100.4 million, 17% in Europe to $24 million, and 28% in Australia and New Zealand to $68.2 million.
Technically, the internal momentum indicators are pointing higher and we see the next key resistance point near the $17.50 level, before returning to the $20.00 handle over the medium-term.
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