Rise in Final Demand May Support Food Retailing and Accommodation Businesses

Company Overview: Treasury Wine Estates Limited (ASX: TWE) is involved in grapes production & sourcing, wine production, marketing, and distribution. Business segments of the company include Australia and New Zealand (ANZ), Americas, Asia, Europe, Middle East, and Africa (EMEA). Ainsworth Game Technology Limited (ASX: AGI) is engaged in developing, designing, manufacturing, selling, and distributing gaming content and platform. Kalkine’s Market Event Report covers the Investment Summary, Event Summary, Data Insights & Analysis, Key Financial Metrics, Risks, Outlook, Technical Analysis along with the Valuation, Target Price, and Recommendation on the stock.

Investment Summary

Event Highlights

Data Insights and Analysis

Key Drivers versus Key Challenges

Considering the Producer Price Index Statistics, two ASX stocks are identified to showcase the momentum.

(1)Treasury Wine Estates Limited (ASX: TWE)

(Recommendation: ‘Buy’ at AUD 11.250, Potential Upside: High Single-Digit)

(M-cap: AUD 8.05bn, Annual Dividend Yield: 3.04%)

The stock has witnessed a dip of 18.89% in last three month, and over the last six months, it has dipped by ~21.87%. The stock has a 52-week low and 52-week high of AUD 10.580 and AUD 14.840, respectively and is currently trading below the 52-week high-low average. TWE was last covered in a report dated ’7 July 2023’.

(2)Ainsworth Game Technology Limited (ASX: AGI)

(Recommendation: ‘Hold’ at AUD 1.075, Potential Upside: High Single-Digit)

(M-cap: AUD 368.78mn)

The stock has gained ~2.38% in last one month, and over the last three months, it has surged by ~9.14%. The stock has a 52-week low and 52-week high of AUD 0.770 and AUD 1.350, respectively and is currently trading above the 52-week high-low average. AGI was last covered in a report dated ’19 June 2023’.

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and geopolitical tensions prevailing. Therefore, it is prudent to follow a cautious approach while investing.

Note 1: Past performance is neither an Indicator nor a guarantee of future performance. 

Note 2: The reference date for all price data, currency, technical indicators, support, and resistance levels is 31 July 2023. The reference data in this report has been partly sourced from REFINITIV. 

Note 3: Investment decisions should be made depending on an individual’s appetite for upside potential, risks, holding duration, and any previous holdings. An ‘Exit’ from the stock can be considered if the Target Price mentioned as per the Valuation and or the technical levels provided has been achieved and is subject to the factors discussed above. 

Technical Indicators Defined: - 

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices.

Disclaimer

Kalkine New Zealand Limited is a Financial Advice Provider (“FAP”) and is authorised by a Class 1 Financial Advice Provider Licence issued by Financial Markets Authority (“FMA”) to provide financial advice. Kalkine provides only general financial advice through its research reports following a person becoming a member. The reports contain buy/sell/hold and other recommendations in relation to equity financial products. The recommendations and opinions [on this website] / [in this report] do not take into account any of your investment objectives, financial situation or needs. Before you make a decision about whether to acquire a financial product, you should obtain the Product Disclosure Statement from the product issuer. You should consider the appropriateness of advice taking into account your own objectives, financial situation and needs and seek independent financial advice before making any financial decisions. If you act on the advice in the research reports, you may have to pay fees, expenses or other amounts (but not to Kalkine).  Further information about the complaints and dispute resolution process, as well as information about Kalkine’s duties are available on Kalkine’s website.  Please read our Financial Advice Provider (FAP) disclosure statement and Complaints Handling Guide, which are available on the website.