Treasury Wine Estates shares slide as US doubts deepen
The Australian wine group has taken another sharp knock as uncertainty clouds its US distribution. The market response has been swift and unforgiving.
Shares in Treasury Wine Estates fell the most in a month after reports that an American distributor may sell its operations raised fresh questions over the group’s US business, according to Bloomberg. The stock dropped as much as 5.2% to AU$5.08 on Thursday, paring back a three-day rally.
As cited by MSN, the S&P ASX 200 wine stock finished the session down 5% at A$5.08. The fall capped a bruising year in which Treasury Wine Estates has lost 51% of its market value.
From blue chip to battered
Thursday’s slump placed the company among the worst performers on the ASX 200 Index. For a 68-year-old group that owns Penfolds, 19 Crimes and Lindeman’s, the descent has been steep enough to induce vertigo even among seasoned investors.
The latest wobble comes against a backdrop of persistent concern over the US, one of Treasury’s most important profit pools. Management has already warned of ongoing distribution problems, a sore point given the significant capital invested in the market in recent years.
Analysts lose patience
Analysts at Morgans struck a sombre tone in a recent note, saying that trading was weaker than expected and that consensus forecasts had been far too optimistic. They added that US performance was particularly disappointing and that gearing now sits well above the company’s target range, a position likely to persist for the next couple of years.
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China, the other great hope, has failed to provide the expected lift. Despite the easing of trade restrictions in 2024, sales momentum has lagged, adding to the sense that the recovery story is running out of road.
Defensive moves and dented confidence
These pressures have put the Treasury on the back foot. The company has downgraded earnings expectations, withdrawn formal guidance and paused its A$200 million share buyback programme. Each step has chipped away at confidence and quickened the sell-off.
Broker sentiment has followed the share price south. According to a Citi report on Thursday morning, the broker downgraded the stock to a sell from neutral with a AU$4.80 price target, implying a further 6% downside and citing concerns over the US outlook.
Morgans retained a hold rating but cut its 12-month target from AU$6.10 to AU$5.25. The broker said earnings uncertainty remains high and warned that it will take time for new management to restore acceptable returns and rebuild credibility.
A brief respite from Europe
The gloom contrasts with a brief rally at the end of 2025 after French billionaire Olivier Goudet revealed a significant stake, as reported by the drinks business. His AU$244 million investment lifted the shares by 10% after Christmas, offering a momentary reminder that value hunters still circle the wreckage.
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