Why Treasury Wine Estates Ltd (ASX:TWE) shares dropped 5% lower today

The Treasury Wine Estates Ltd (ASX:TWE) share price has dropped lower today. Is this why?

| More on:

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

a woman

The Treasury Wine Estates Ltd (ASX: TWE) share price has taken a tumble on Wednesday and found itself amongst the worst performers on the local market.

At lunch the wine company's shares are down almost 5% to $15.43 following the release of export data from Wine Australia.

What data was released?

This morning Wine Australia released its export data for the 12 months ended September 30.

The data showed that Australian wine exports continued to experience strong growth in both value and volume over the 12-month period. The value of wine exports during the period increased 11% to $2.71 billion, whereas volume lifted 5% to 842 million litres.

In addition to this, shipments of bottled wine increased by 8% in value to $2.16 billion and 2% in volume to 366 million litres. There was also growth in shipments of unpackaged wine during the 12 months. These grew 23% in value to $525 million and 9% in volume to 468 million litres.

One final positive was the increase in the average value of wine exported. The data shows that this increased 7% to $5.90 per litre for bottled wine, 13% to $1.12 per litre for unpackaged wine, and 5% to $3.21 per litre for all wine exported.

According to the data, the strong performance was driven by growth in all but one major export destination. Northeast Asia was the star of the show with a 24% increase in exports to $1.14 billion. This offset a disappointing performance for U.S. exports which experienced a $38 million decline. This can be seen on the table shown below.

Source: Wine Australia

It appears to be the decline in U.S. wine exports that has sent the Treasury Wine share price tumbling today. This is a big market for the company and is expected to be a key driver of future growth.

However, given that management last week reiterated that it was on track to reach its target of 25% profit growth in FY 2019, I think today's selloff has been unnecessary.

In light of this, I think this could potentially be a buying opportunity for investors that are prepared to hold its shares for the long term.

Elsewhere in the industry, Australian Vintage Limited (ASX: AVG) and Broo Ltd (ASX: BEE) shares are flat, while Gage Roads Brewing Co Limited (ASX: GRB) shares are down 4.5% today.

Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia has recommended Treasury Wine Estates Limited. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

More on Share Fallers

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why KMD, Tamboran Resources, Whitehaven Coal, and WiseTech Global shares are falling today

These shares are out of form on Thursday. What's going on?

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why Dateline, Karoon Energy, Lindian, and PEXA shares are falling today

These shares are missing out on the good times on Wednesday. But why?

Read more »

A man slumps crankily over his morning coffee as it pours with rain outside.
Share Fallers

These were the worst-performing ASX 200 shares in March

These shares were out of form in March. Let's see why investors sold them off.

Read more »

Disappointed man with his head on his hand looking at a falling share price his a laptop.
Share Fallers

Why 4DMedical, New Hope, Santos, and St George Mining shares are dropping today

These shares are under pressure on Tuesday. But why?

Read more »

A woman is excited as she reads the latest rumour on her phone.
Share Fallers

These 3 dirt-cheap ASX shares are tipped to climb another 50-90%

These shares are now trading at super low prices.

Read more »

Shot of a young businesswoman looking stressed out while working in an office.
Share Fallers

Why 4DMedical, Brainchip, Catapult, and Star Entertainment shares are falling today

These shares are starting the week in the red. But why>

Read more »

Frustrated stock trader screaming while looking at mobile phone, symbolising a falling share price.
Share Fallers

Why DroneShield, Hub24, Syrah, and Weebit Nano shares are sinking today

These shares are ending the week in the red. But why?

Read more »

A worried woman sits at her computer with her hands clutched at the bottom of her face.
Share Fallers

These 3 ASX 200 shares have hit fresh multi-year lows: Buy, sell or hold?

One of these stocks has crashed over 50% over the past year alone.

Read more »