- Telsey Advisory Group Analyst Joseph Feldman demoted Vintage wineries inc VWE Rating from Outperform to Market Perform and lowered the price target to $6 from $12.
- The downgrade came due to challenges overlapping harsh comparisons over the past two years from increased demand during the pandemic helped by US government stimulus programs, the reopening of the economy leading to more consumers visiting wineries, events Hosted and attended social gatherings, fueled and acquisitions.
- The analyst said a deteriorating macro environment for the consumer, with high inflation and rising interest rates, is also contributing to the re-rating.
- Feldman added ongoing supply chain challenges and lack of visibility into underlying financials as reasons for the downgrade.
- He noted that Vintage Wine missed adjusted EBITDA in the fourth quarter of FY22 due to higher supply chain, labor and acquisition integration costs.
- Also the bleak outlook for FY23 sales between $300 million and $310 million versus an estimate of $330 million results from economic uncertainty.
- The analyst believes that FY23 will be challenging for the company as it embarks on a path to revenue normalization, compounded by a challenging macro environment and ongoing cost pressures.
- Price promotion: VWE shares are trading 38.93% lower at $3.38 on the latest check Wednesday.
- Photo via company
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