Solid Pricing Amid Premiumisation, but Treasury Wine's First-Half Volumes Were Weaker Than Expected

We maintain our AUD 11.50 fair value estimate for shares in Treasury Wine Estates following the release of interim fiscal 2023 results. Underlying EBIT lifted 17% on the prior corresponding period, or pcp, to AUD 308 million as increased premiumisation, price rises, and operational cost savings more than offset a 10% decline in volume. First-half earnings were weaker than expected. While we lower our fiscal 2023 EBIT forecast by 4% to AUD 598 million, the impact is immaterial to our fair value estimate. At current prices, shares in Treasury screen expensive.