Shares of Treasury Wine (ASX:TWE) surged as much as 3.9% to A$11.92 in its best day since April 11, as long as gains hold.

The surge is primarily due to Jefferies' decision to upgrade the wine company’s stock to ‘buy’ from ‘hold’, with a new price target set at A$13.00.

Additionally, China has lifted its longstanding tariffs on Australian barley, which have been in place for three years.

Treasury Wine reaps nearly A$200 million in earnings before interest and tax from the Chinese market, according to Jefferies.

This move by China could potentially elevate Treasury Wine’s earnings by roughly A$80 million; however, Jefferies warns that it could take time to rebuild the supply.

Jefferies also anticipates a reduction in costs following the planned closure of the company’s commercial Karadoc winery in North-west Victoria.

Despite these positive developments, Jefferies foresees potential challenges in the American market for lower-priced wine.

Treasury Wine’s shares have been on an uptrend, rising for five straight sessions and hitting their highest since May 29.

Ten out of 17 analysts rate the stock ‘buy’ or higher, four as ‘hold’ and three as ‘sell’ or lower, with a median price target of A$13.40, according to Refinitiv data.

As of the last close, the stock had fallen around 13.9% this year.

Treasury Wine is an Australian wine company that produces and distributes various wine brands globally.