The Treasury Wine Estates Ltd (ASX: TWE) share price is spilling on Wednesday despite no announcements from the company.
At the time of writing, the wine giant's shares are swapping hands at $13.22, down 0.83%.
Let's take a look at what may be causing the share to fall today.
Image source: Getty Images
What's happening with Treasury Wine shares?
On the back of the company's full-year results, investors are selling off Treasury Wine shares as they go ex-dividend today.
This means if you purchased the company's shares yesterday or before and owned them at today's market open, you'll be eligible for the latest dividend.
When a company reaches its ex-dividend day, its shares tend to fall in proportion to the dividend paid out. However, this can vary depending on how the market is tracking for the day as well as investor sentiment.
For those eligible for the Treasury Wine final dividend, you'll receive a payment of 16 cents per share on 30 September. The dividend is also fully franked.
This brings the FY 2022 dividend to 31 cents per share, which is 10.7% higher than the prior corresponding period.
Furthermore, the full-year dividend represents 69% of the company's net profit after tax (NPAT).
Treasury Wine's long-term dividend policy is to target a payout ratio of 55% to 70% of NPAT.
Is Treasury Wine shares a buy?
Following the company's 2022 financial scorecard, a number of brokers updated their outlook on Treasury shares.
As reported by ANZ Share Investing, Macquire upgraded its rating to outperform from neutral. In addition, the broker raised its price target by 20% to $15.00 per Treasury Wine share. Based on the current price, this implies an upside of 12%.
On the other hand, UBS and Morgans lifted their price targets by 9.3% to $14.75, and 13% to $15.71, respectively.
Treasury Wine share price snapshot
For the first half of 2022, the Treasury Wine share price travelled sideways before accelerating to a 52-week high of $13.62 on 19 August.
It appears investors are growing in confidence that the worst is behind the company following its improved outlook.
Treasury Wine has a price-to-earnings (P/E) ratio of 36.10 and commands a market capitalisation of approximately $9.55 billion.
