Investors seeking to diversify their portfolios might find valuable insights in the latest recommendations from leading broker Ord Minnett, which has spotlighted two prominent ASX 200 shares. The broker has issued a “buy” rating for Ramelius Resources Ltd (ASX: RMS) and a “hold” recommendation for Treasury Wine Estates Ltd (ASX: TWE), each based on distinct strategic evaluations and market conditions.
Ramelius Resources: A Golden Opportunity
Ord Minnett has expressed optimism about Ramelius Resources, a key player in the gold mining sector. The company recently unveiled a five-year production outlook, projecting a significant increase in output. By the end of the decade, Ramelius aims to double its production to 500,000 ounces annually. Despite a projected dip in free cash flow, the broker remains bullish on the stock’s potential.
“Ramelius Resources delivered a five-year outlook following its recent Spartan acquisition that forecasts gold production will more than double to circa 500,000 ounces a year by FY30, although free cashflow (FCF) will take a hit of circa 23% versus consensus estimates in FY26 before improving from there, with the outlook signalling upgrades of 25% for market expectations for FCF over FY27–30.”
To achieve these ambitious targets, Ramelius plans to advance capital expenditure, specifically to expand the Mt Magnet mill capacity. Construction is slated to begin in the March quarter of next year, with completion expected by September 2027. This strategic move is anticipated to yield positive long-term impacts, aligning with previous market estimates.
Ord Minnett notes that recent fluctuations in Ramelius’ share price have been disproportionate to its business fundamentals. The broker argues that the stock is currently undervalued compared to its peers, presenting a compelling investment opportunity.
“In our view, the steep pull-back in the Ramelius stock price since early October is not commensurate with the improving fundamentals of its business, and the stock now screens even more attractively versus its peers, e.g. a price to net asset value multiple of 0.8x versus the 1.2x pricing of its peers.”
With a “buy” rating and a price target of $4.50, Morgans anticipates a potential upside of over 25% for Ramelius shares within the next 12 months.
Treasury Wine Estates: A Strategic Hold
Meanwhile, Treasury Wine Estates, a giant in the wine industry, has been reevaluated by Ord Minnett in light of recent leadership changes. With Sam Fischer stepping in as the new CEO, the broker has adjusted its valuation, reflecting significant shifts in its FY26 earnings forecast and a revised target price.
“Ord Minnett has reviewed its Treasury Wine Estates model as new CEO Sam Fischer takes the reins, which has led to significant changes to our FY26 earnings forecast and a steep reduction in our target price to $6.50 from $8.00.”
Key factors influencing this reassessment include excess inventory in the Americas, weak demand for Penfold products in China, and adjustments related to the acquisition of Daou Vineyards. The broker forecasts a revenue decline of $150 million due to inventory clearance, impacting the company’s margins.
The challenges in the US market, characterized by its fragmented nature and Treasury’s lack of scale, add further complexity to the company’s strategic outlook. Despite these hurdles, Morgans maintains a “hold” rating with a price target of $6.50, suggesting a potential upside of 13% from current levels.
Market Implications and Investor Outlook
The recommendations from Ord Minnett underscore the nuanced dynamics within the ASX 200 landscape. For Ramelius Resources, the focus on production growth and strategic investments positions it as a promising buy, particularly for those bullish on gold. Conversely, Treasury Wine Estates faces a period of strategic recalibration under new leadership, warranting a more cautious approach from investors.
As the market continues to evolve, investors will be closely monitoring these companies’ performance against the backdrop of broader economic trends and sector-specific developments. The insights from Ord Minnett provide a valuable lens through which to assess potential opportunities and risks in the current investment climate.
