Vintage Wine Estates (VWE) Falls as Analyst Says Wine Not Immune from Macro Slowdown

July 1, 2022 1:57 PM EDT
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Price: $7.00 --0%

Rating Summary:
    2 Buy, 0 Hold, 0 Sell

Rating Trend: Up Up

Today's Overall Ratings:
    Up: 13 | Down: 24 | New: 8
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Vintage Wine Estates, Inc. (NASDAQ: VWE) is down 5% in afternoon trading Friday after DA Davidson Michael Baker cut estimates and his price target on the stock $13.00 (from $14.00) saying they’ve seen a number of data points recently to suggest that their business is not immune to the macro economic slowdown.

"We are reducing our 4Q22 (June 2022) and FY23 (June 2023) sales and EBITDA estimates on Vintage Wine Estates as we’ve seen a number of data points recently to suggest that their business is not immune to the macro economic slowdown seen in other consumer areas," the analyst commented. "We continue to model growth in sales both this quarter and next year, both from an organic standpoint and from businesses acquired throughout FY2022. But, we are taking a more conservative approach to our model given recent data checks, and are now below consensus."

Below are several datapoints, the analyst cited on some slowdown in wind trends:

  • Constellation brands reported better than expected wine trends for their May quarter. Total organic dollar growth was 2%, a slowdown from 5% in the previous quarter. U.S. shipments decreased 3.3% versus down 2.8% the previous quarter.
  • Constellation brands missed on the profit line in the U.S., coming in at $91M versus the estimate of $109M and down 13% y/y due to higher raw material and supply chain costs.
  • Along with LVMH’s announced acquisition of Joseph Phelps, the Moet Hennessy Chairman and CEO Philippe Schaus said that the U.S. the company has seen a slight drop-off in demand in lower-priced segments and expressed concerns that the slowdowns will continue after the summer, as reported by CNBC.
  • After an improvement in April, IRI wine data turned negative again in May. We believe this may be due to the slowing economy and could continue into the coming months

While cutting numbers, the analyst maintained a Buy rating.

For an analyst ratings summary and ratings history on Vintage Wine Estates, Inc. click here. For more ratings news on Vintage Wine Estates, Inc. click here.

Shares of Vintage Wine Estates, Inc. closed at $7.86 yesterday.

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