Treasury Wine Estates Ltd
(ASX: TWE) has announced its CEO intends to retire, is the share price a buy?
Treasury Wines is a world-leader in wine making and brand marketing with some 13,000 hectares of vineyards available and around 3,400 employees across 70 countries. Some of more popular brands include Lindeman’s, Penfolds, Pepperjack, Rosemount, Yellowglen and Wolf Blass.
Treasury Wine Estates CEO To Retire
Treasury Wine Estates CEO Michael Clarke intends to retire in the first quarter of FY21, meaning he has given notice of one year. He’s going to spend time in the UK with his family after retirement.
The company’s Chief Operating Officer, Tim Ford, will become the new CEO. Mr Clarke has agreed to be an advisor to the company for an additional year.
Treasury Wine Estates Chairman Paul Rayner said: “It is without question the extraordinary transformation and outstanding financial returns that TWE has achieved, have been driven by Michael’s leadership over the past five and a half years.
“The structural changes and initiatives delivered by Michael and his team have established TWE as a significantly stronger business than when he first joined the company, and one that is very well placed to continue delivering sustainable, margin accretive growth well into the future.”
Management reassured investors that Mr Ford has been working alongside Mr Clarke in various leadership roles over the past eight years. Since January 2019 he has been running the operation of all TWE regions. Before that he was Deputy Chief Operating Officer running the Asia, Europe and ANZ regions. Before Treasury Wine he worked at National Foods and CUB.
Is The Treasury Wine Share Price A Buy?
At the pre-open share price, Treasury Wine Estates is valued at 26 times the estimated earnings for the 2020 financial year. The company has faced a short attack recently, the valuation is not cheap and the share price is almost at all-time highs – although that makes sense with continuing growth and record low interest rates.
It’s one of the better growth stories on the ASX and it’s taking advantage of the growing Asian demand for premium wine. It could be a decent one to own for the long term, but I think one of the shares in the free report below could be an even better long term idea.
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