Treasury Wine Estates shares slump 56% this year. Buying opportunity or time to sell up?

Treasury Wine Estates Ltd (ASX: TWE) shares crashed 9.29% to end the day at $4.98 per share on Wednesday afternoon. 

The drop means the shares have now fallen 12.87% over the past month and are a whopping 55.85% lower than this time last year. It’s been a relatively steady and consistent decline over the past 12 months too. It’s currently the worst performer on the ASX 200 Index.

What has happened to Treasury Wine Estates shares?

The company released an investor update and outlook for the first half of FY26 on Wednesday morning.

The struggling wine giant said that trading conditions have weakened in recent months, particularly in the US and China. And as a result, near term improvement is now considered unlikely. Its expectations for sales volume growth have also moderated.

The company also said that customer inventory levels in both markets are currently above optimal levels. In China, parallel import activity has also been disrupting pricing for its flagship Penfolds brand, prompting management to take decisive action.

Treasury Wine Estates now expects its earnings before interest and tax (EBIT) to be between $225 million and $235 million in the first half of FY26. Although it still anticipates better performance in the second half of the year. 

Clearly investors were unimpressed with the result and have sold off the stock ahead of any potential further downside.

Is there any upside ahead or is it time to sell the shares?

Despite the consistently dwindling share price, analysts are still remarkably optimistic about Treasury Wine Estates shares. Although this might change after yesterday’s announcement. I’d sit tight for now until the dust has settled but I’m quietly optimistic that the latest result is mostly priced-in by the market already.

Data shows that 8 out of 17 analysts have a buy or strong buy rating on the stock. Another 8 have a hold rating and 1 analyst has a strong sell rating. 

As it stands, some analysts still expect the share price to storm higher over the next 12 months too. The average target price is $7.37, which implies a potential 48.08% upside at the time of writing. Although this could be as high as $9.90, which implies a whopping 98.8% upside from the current trading price.

The team at Morgans recently confirmed its hold rating for the wine stock and set a $6.10 price target for the next 12 months. The broker noted earlier this month that it expected that the 1H FY26 result will be particularly weak and therefore the broker has made “large revisions to our forecasts and stress that earnings uncertainty remains high”.

The post Treasury Wine Estates shares slump 56% this year. Buying opportunity or time to sell up? appeared first on The Motley Fool Australia.

More reading

• Why DroneShield, Graincorp, Treasury Wine, and Woodside shares are sinking today
• Why are Treasury Wine shares crashing 17% today?
• Treasury Wine Estates’ cost-cut plan and outlook: What investors need to know
• 5 things to watch on the ASX 200 on Wednesday
• What can investors expect from Treasury Wines’ update tomorrow?

Motley Fool contributor Samantha Menzies has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has positions in and has recommended Treasury Wine Estates. The Motley Fool Australia has positions in and has recommended Treasury Wine Estates. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.