The Treasury Wine Estates Ltd (ASX: TWE) share price has continued its solid run today and reached a new all-time high of $15.09.
This brought the wine company's year-to-date return to an impressive 41%.
Can Treasury Wine's shares continue to climb higher?
One leading broker believes there's still plenty left in the tank for Treasury Wine's shares.
According to a note out of Morgan Stanley, the broker has retained its overweight rating and increased the price target on its shares from $15.00 to $16.00.
This price target implies potential upside of over 6% from the current share price.
Its analysts have increased the price target on the wine company's shares after revising their future earnings forecasts for Treasury Wine upwards due to demand from China strengthening, a disappointing European harvest, and the company's valuation compared to global peers.
Should you invest?
Based on Morgan Stanley's FY 2018 forecast for earnings per share of 48 cents, Treasury Wine's shares are changing hands at approximately 31x estimated forward earnings.
Considering the level of growth the company has exhibited and its positive future outlook, I would agree with Morgan Stanley that its valuation isn't too demanding.
In light of this, I continue to believe that the wine company could be a good long-term buy and hold investment alongside the likes of Ramsay Health Care Limited (ASX: RHC) and Nextdc Ltd (ASX: NXT).
