11 Best Wine Stocks To Buy Heading Into 2023

Published on December 19, 2022 at 6:51 pm by Hamna Asim in Hedge Funds, News

In this article, we discuss 11 best wine stocks to buy heading into 2023. If you want to see more stocks in this selection, check out 5 Best Wine Stocks To Buy Heading Into 2023.

According to Future Market Insights, the global wine market is expected to be worth $513.8 billion in 2022 and is forecasted to be valued at $846.3 billion by 2032, demonstrating a compound annual growth rate of 5.1% during the forecast period. The wine market is estimated to reflect approximately 2% to 4% of the overall alcohol and beverages sector.

Growing consumption of sparkling wine among all age groups is expected to increase the demand for wine worldwide. Due to this rising trend, sales of sparkling wine are forecasted to expand at a CAGR of 8.5% between 2022 and 2032. As per Future Market Insights, the demand for wine is expected to reach a shipment of approximately 999.6 billion tons through the end of 2022.

In addition to that, wine has become increasingly popular in the global marketplace, which has made it an important commodity. Wine is also easily tradable due to relaxed trade duties and tariff barriers. The growing trend of socialization and alcohol worldwide, paired with the demand for low-alcohol content beverages, is driving the growth in the wine market. Some of the best wine stocks to invest in heading into 2023 include Brown-Forman Corporation (NYSE:BF-B), Constellation Brands, Inc. (NYSE:STZ), and Anheuser-Busch InBev SA/NV (NYSE:BUD).

Our Methodology

We selected the following wine stocks based on positive analyst coverage, strong business fundamentals, and market visibility. We have assessed the hedge fund sentiment from Insider Monkey’s database of 920 elite hedge funds tracked as of the end of the third quarter of 2022. The list is arranged according to the number of hedge fund holders in each firm.

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Best Wine Stocks To Buy Heading Into 2023

11. Splash Beverage Group, Inc. (NYSE:SBEV)

Number of Hedge Fund Holders: 4

Splash Beverage Group, Inc. (NYSE:SBEV) is based in Fort Lauderdale, Florida, and the company engages in the manufacturing, distribution, marketing, and sale of alcoholic beverages in the United States. Its beverages include flavored tequilas, hydration and recovery isotonic sports drinks, wine, and sangria. The company reported a Q3 2022 revenue of $5.1 million, up 72.9% on a year-over-year basis.

On December 16, EF Hutton analyst Michael Albanese initiated coverage of Splash Beverage Group, Inc. (NYSE:SBEV) with a Buy rating and a $3 price target, calling it a “fast-growing player in the beverage industry with exciting prospects.”

According to Insider Monkey’s data, 4 hedge funds were bullish on Splash Beverage Group, Inc. (NYSE:SBEV) at the end of the third quarter of 2022, compared to 3 funds in the prior quarter. Ken Griffin’s Citadel Investment Group is a prominent stakeholder of the company, with 79,320 shares worth $109,000.

In addition to Brown-Forman Corporation (NYSE:BF-B), Constellation Brands, Inc. (NYSE:STZ), and Anheuser-Busch InBev SA/NV (NYSE:BUD), Splash Beverage Group, Inc. (NYSE:SBEV) is one of the best wine stocks to invest in.

10. Compañía Cervecerías Unidas S.A. (NYSE:CCU)

Number of Hedge Fund Holders: 5

Compañía Cervecerías Unidas S.A. (NYSE:CCU) was founded in 1850 and is based in Santiago, Chile. It works as a beverage company in Chile, Argentina, Bolivia, Colombia, Paraguay, and Uruguay, operating through three segments – Chile, International Business, and Wine. Compañía Cervecerías Unidas S.A. (NYSE:CCU) produces and sells alcoholic and non-alcoholic beer under proprietary and licensed brands, in addition to distributing Pernod Ricard products in retail stores. Compañía Cervecerías Unidas S.A. (NYSE:CCU) is one of the premier wine stocks to invest in. On November 9, the company posted a Q3 GAAP EPS of CLP46.60 and a revenue of CLP684.1 million, up 9.9% year-over-year.

On November 25, JPMorgan analyst Lucas Ferreira raised the price target on Compañía Cervecerías Unidas S.A. (NYSE:CCU) to $14 from $13 and maintained a Neutral rating on the shares. After seeing some sequential improvement in the Q3 results, Q2 was the lowest point in profitability for Compañía Cervecerías Unidas S.A. (NYSE:CCU) and the company should see improving trends ahead, the analyst told investors in a research note.

According to Insider Monkey’s Q3 data, 5 hedge funds were long Compañía Cervecerías Unidas S.A. (NYSE:CCU), compared to 9 funds in the prior quarter. Jean-Marie Eveillard’s First Eagle Investment Management is the largest position holder in the company, with 14.6 million shares worth $157.6 million.

9. Vintage Wine Estates, Inc. (NASDAQ:VWE)

Number of Hedge Fund Holders: 6

Vintage Wine Estates, Inc. (NASDAQ:VWE) is a Nevada-based company that produces and sells wines and craft spirits in the United States, Canada, and internationally. The company offers its products under the Layer Cake, Cameron Hughes, Clos Pegase, B.R. Cohn, Firesteed, Bar Dog, Kunde, and Cherry Pie brands. It is one of the top wine stocks to monitor for next year.

On November 9, Vintage Wine Estates, Inc. (NASDAQ:VWE) reported a FQ1 non-GAAP EPS of $0.05 and a revenue of $77.9 million, topping Wall Street estimates by $0.03 and $10.37 million, respectively. Revenue over the period climbed nearly 40% on a year-over-year basis. The company reaffirmed fiscal 2023 guidance for net revenue of approximately $300 million to $310 million, while the consensus revenue estimate is $305.49 million.

Investment advisory Cowen thinks Vintage Wine Estates, Inc. (NASDAQ:VWE) seems well positioned to capitalize on growth in the outperforming wine category despite some macroeconomic constraints. Analyst Vivian Azer noted that Vintage Wine Estates, Inc. (NASDAQ:VWE) stands to gain more market share through the recent consumer downtrading trend as its wine portfolio is concentrated at $10 to $20 price points. Looking ahead, the analyst believes Vintage Wine Estates, Inc. (NASDAQ:VWE) has a balance sheet and track record to execute against top and bottom-line accretive M&A. Cowen has an Outperform rating on the stock with a price target of $7.50 as of December 19.

According to Insider Monkey’s data, 6 hedge funds were bullish on Vintage Wine Estates, Inc. (NASDAQ:VWE) at the end of September 2022, compared to 10 funds in the earlier quarter. David Paradice’s Paradice Investment Management is the largest position holder in the company, with approximately 4 million shares worth $11 million.

Meridian Funds made the following comment about Vintage Wine Estates, Inc. (NASDAQ:VWE) in its Q3 2022 investor letter:

“Vintage Wine Estates, Inc. (NASDAQ:VWE) is a top-10 U.S. wine producer by sales with more than 50 brands, 2,800 acres of vineyards, state-of-the-art production facilities, and diversified distribution, including wholesale, direct-to-consumer, and business-to-business. The company seeks to augment organic growth with acquisitions of small wineries that it can plug into its superior operating, distribution, and marketing platform to accelerate growth and enhance profit. When we initiated a position in Vintage Wine during the first quarter of 2021, its stock was trading at a significant discount to beverage peers as a result of Caroline pandemic-related disruptions to the acquisition pipeline and on-premise sales channels. Weak earnings due to write-offs caused by wildfire damage to its vineyards also weighed on the stock. We believe valuation multiples were further compressed because Vintage Wine was a special-purpose acquisition company at a time when these investment vehicles were deeply out of favor. Our investment thesis was that steady profit growth helped by new capacity investments coming online as well as strength in the direct-to-consumer and business-to-business channels would drive earnings growth and multiple expansion. During the quarter, Vintage Wine’s stock declined significantly after the company reported disappointing earnings results. The wine producer has been hit hard by supply chain problems, which hurt both sales and profits. It also lost some sales due to brand repositioning. We reduced our exposure in the stock during the quarter as a matter of discipline but maintain a small position. While we believe it will take several quarters for Vintage Wine’s management to establish credibility with investors, we are willing to be patient because the long-term thesis appears intact, and the stock currently trades below liquidation value supported by hard assets such as valuable real estate and modern production equipment.”

8. Anheuser-Busch InBev SA/NV (NYSE:BUD)

Number of Hedge Fund Holders: 14

Anheuser-Busch InBev SA/NV (NYSE:BUD) is a Belgian beverage company that produces, distributes, and sells beer, wine and other alcoholic beverages, and soft drinks worldwide. On October 27, Anheuser-Busch InBev SA/NV (NYSE:BUD) reported a Q3 non-GAAP EPS of $0.84, beating market estimates by $0.11. The company expects FY22 EBITDA to grow between 6% to 8% and the revenue to grow ahead of EBITDA from a solid combination of volume and price. It is one of the best wine stocks to monitor.

On November 28, JPMorgan analyst Jared Dinges upgraded Anheuser-Busch InBev SA/NV (NYSE:BUD) to Overweight from Underweight with a price target of $70, up from $45. The analyst sees “scope for earnings outperformance” and said the company’s “rapidly deleveraging balance sheet provides optionality.” AB InBev’s transition to a “higher-quality top-line growth story is well underway,” the analyst wrote in a research note.

According to Insider Monkey’s third quarter database, 14 hedge funds were long Anheuser-Busch InBev SA/NV (NYSE:BUD), with collective stakes worth $740.2 million, compared to the same number of funds in the prior quarter worth $735.6 million. Ken Fisher’s Fisher Asset Management is the largest stakeholder of the company, with 9.2 million shares worth $418.8 million.

Here is what ClearBridge Investments Large Cap Growth Strategy has to say about Anheuser-Busch InBev SA/NV (NYSE:BUD) in its Q4 2021 investor letter:

“To make room for these new names and optimize the growth profile of the Strategy, we exited two additional positions during the quarter. We sold out of Anheuser-Busch InBev as we see too much work ahead for the world’s largest beer maker to re-ignite sales growth post COVID-19. While the company should benefit from a recovery in the on-premise channel, individual country complexities, the hedging of raw materials, and senior management turnover leave us more confident in the Strategy’s other reopening-related holdings.”

7. The Duckhorn Portfolio, Inc. (NYSE:NAPA)

Number of Hedge Fund Holders: 15

The Duckhorn Portfolio, Inc. (NYSE:NAPA) is a California-based company that produces and sells wines in North America. It offers wines under a portfolio of brands, including Duckhorn Vineyards, Decoy, Goldeneye, Paraduxx, Migration, Canvasback, Calera, Kosta Browne, Greenwing, and Postmark.

On December 1, The Duckhorn Portfolio, Inc. (NYSE:NAPA) reported a FQ1 non-GAAP EPS of $0.18 and a revenue of $108.2 million, outperforming market consensus by $0.04 and $9.06 million, respectively. For the fiscal year 2023 guidance, the company reaffirmed net sales of $393 million to $401 million, versus a $397.51 million consensus. The Duckhorn Portfolio, Inc. (NYSE:NAPA) expects adjusted EPS to range between $0.62 to $0.64, compared to a $0.63 consensus. It is one of the best wine stocks to buy heading into 2023.

Barclays analyst Lauren Lieberman on December 12 raised the price target on The Duckhorn Portfolio, Inc. (NYSE:NAPA) to $19 from $18 and kept an Equal Weight rating on the shares. The company reported a “healthy” Q1 beat and reiterated its sales and profit guidance, the analyst wrote in a research note.

According to Insider Monkey’s data, 15 hedge funds were bullish on The Duckhorn Portfolio, Inc. (NYSE:NAPA) at the end of September 2022, compared to 13 funds in the prior quarter. Select Equity Group is the biggest stakeholder of the company, with approximately 7 million shares worth $99.5 million.

6. Diageo plc (NYSE:DEO)

Number of Hedge Fund Holders: 20

Diageo plc (NYSE:DEO) is a London-based company that produces, markets, and sells alcoholic beverages including wine, scotch, whisky, gin, vodka, rum, liqueur, tequila, brandy, beer, and cider. On October 6, the company announced that it has had a good start to fiscal year 2023, with organic net sales growth across all regions. Diageo CEO Ivan Menezes said the growth track points towards the company’s superior portfolio, ongoing investment in brand building, and agile supply chain.

On December 13, investment advisory Barclays maintained an Overweight rating on Diageo plc (NYSE:DEO) but lowered the firm’s price target on the shares to 5,010 GBp from 5,430 GBp. Analyst Laurence Whyatt issued the ratings update.

According to Insider Monkey’s data, 20 hedge funds reported owning stakes in Diageo plc (NYSE:DEO) at the end of the third quarter of 2022, compared to 22 funds in the last quarter. Tom Gayner’s Markel Gayner Asset Management is the biggest position holder in the company, with 1.35 million shares worth $229.2 million.

Like Brown-Forman Corporation (NYSE:BF-B), Constellation Brands, Inc. (NYSE:STZ), and Anheuser-Busch InBev SA/NV (NYSE:BUD), Diageo plc (NYSE:DEO) is one of the premier wine stocks to consider buying.

Here is what ClearBridge Aggressive Growth Strategy has to say about Diageo plc (NYSE:DEO) in its Q2 2022 investor letter:

“Diageo is a leading global distiller and brewer which addresses the large ($500 billion-plus) and fragmented market for spirits. With its portfolio of premium products, we see Diageo as a steady compounder poised for sustained, above industry growth. The company’s margins remain below pre-COVID levels in a number of geographies and should continue to recover as channels reopen, though we also see opportunities for consistent margin expansion beyond this period of rebound. The spirits category is not immune to weaker consumer spending nor inflation; however the majority of Diageo’s profits are from the U.S. market, which has historically been more resilient. Additionally, the company has a number of margin levers to help combat rising input costs.”

Click to continue reading and see 5 Best Wine Stocks To Buy Heading Into 2023.

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