The Duckhorn Portfolio Inc.

Duckhorn Portfolio Inc (NYSE: NAPA) manufactures high-end and super-premium wines under various winery labels, such as Duckhorn Vineyards, Paraduxx, Goldeneye, Migration, Decoy, Canvasback, Calera, Kosta Browne, Greenwing, and Postmark. Their income is derived from two primary sources: wholesale transactions and direct-to-consumer sales. The wholesale revenue comes from direct sales to retailers and eateries in California, as well as from distributing through agents and distributors in various U.S. states and international export distributors.

Recent Financial and Business Updates:

• Fiscal 2023 Income Statement Review:
  • Reported a gross profit of USD215.68 million, as compared to USD185.18 million for fiscal 2022.
  • Income from operations amounted to USD105.97 million for the year.
  • Net income was reported to be USD69.29 million for the year.
  • Per share diluted and basic earnings stood at USD0.60.
• Balance Sheet Review:
  • Total assets amounted to USD1.34 billion in fiscal 2023, as compared to USD1.25 billion in the previous year.
  • Total liabilities mounted to USD405.27 million for the fiscal year ending on July 31, 2023.
  • Total stockholders’ equity was USD942.408 million for the year.
• Business Update:
  • It has been declared that Alex Ryan will be stepping down from his position as President, Chief Executive Officer, and Chairman of the company.
  • The Duckhorn Board of Directors has named Deirdre Mahlan, an experienced professional in the alcohol and beverage sector, as the interim President, Chief Executive Officer, and Chairperson.
  • The company has initiated a quest to find a new leader for the organization.

Technical Observation (on the daily chart)

The stock reached its 52-week low of USD 9.46 on October 06, 2023. The Relative Strength Index (RSI) over a 14-day period stands at 19.06, currently in the oversold zone, with expectations of a short-term upside momentum or some consolidation. Additionally, the stock's current positioning is below both the 21-day Simple Moving Average (SMA) and the 50-day SMA, which may serve as dynamic short-term resistance levels. 

As per the above-mentioned price action, recent key business and financial updates, momentum in the stock over the last month, and technical indicators analysis, a ‘Buy’ rating has been given to Duckhorn Portfolio Inc (NYSE: NAPA) at its current price of USD 9.49 as on October 06, 2023, at 6:52 am PDT.

Individuals can evaluate the stock based on the support and resistance levels provided in the report in case of keen interest taking into consideration the risk-reward scenario. 

Markets are trading in a highly volatile zone currently due to certain macro-economic issues and prevailing geopolitical tensions. Therefore, it is prudent to follow a cautious approach while investing. 

Related Risk: This report may be looked at from a high-risk perspective and a recommendation is provided for a short duration. This report is solely based on technical parameters, and the fundamental performance of the stocks has not been considered in the decision-making process. Other factors which could impact the stock prices include market risks, regulatory risks, interest rates risks, currency risks, social and political instability risks etc. 

How to Read the Charts?

The yellow colour line reflects the 21-period simple moving average (SMA) while the blue line indicates the 50- period simple moving average (SMA). SMA helps to identify existing price trends. If the prices are trading above the 21-period and 50-period moving average, then it shows prices are currently trading in a bullish trend.

The orange colour line in the chart’s lower segment reflects the Relative Strength Index (14-Period) which indicates price momentum and signals momentum in trend. A reading of 70 or above suggests overbought status while a reading of 30 or below suggests an oversold status.

The red and green colour bars in the chart’s lower segment show the volume of the stock. The volume is the number of shares that changed hands during a given day. Stocks with high volumes are more liquid than stocks with lesser volume as liquidity in stocks helps with easier and faster execution of the order.

The Orange colour lines are the trend lines drawn by connecting two or more price points and used for trend identification purposes. The trend line also acts as a line of support and resistance.

Technical Indicators Defined: -

Support: A level at which the stock prices tend to find support if they are falling, and a downtrend may take a pause backed by demand or buying interest. Support 1 refers to the nearby support level for the stock and if the price breaches the level, then Support 2 may act as the crucial support level for the stock. 

Resistance: A level at which the stock prices tend to find resistance when they are rising, and an uptrend may take a pause due to profit booking or selling interest. Resistance 1 refers to the nearby resistance level for the stock and if the price surpasses the level, then Resistance 2 may act as the crucial resistance level for the stock. 

Stop-loss: It is a level to protect further losses in case of unfavourable movement in the stock prices. 

The reference date for all price data, currency, technical indicators, support, and resistance levels is October 06, 2023. The reference data in this report has been partly sourced from REFINITIV. 

Abbreviations

CMP: Current Market Price

SMA: Simple Moving Average

RSI: Relative Strength Index

USD: United States dollar 

Note: Trading decisions require a thorough analysis by individual. Technical reports in general chart out metrics that may be assessed by individuals before any stock evaluation. The above are illustrative analytical factors used for evaluating the stocks; other parameters can be looked at along with additional risks per se. Past performance is neither an indicator nor a guarantee of future performance.