It's been a tough 12-months for Treasury Wine Estates Ltd (ASX: TWE) shares.
Shares in the S&P/ASX 200 Index (ASX: XJO) global wine company are down 0.6% today, changing hands for $8.60 apiece.
That sees the stock down 25.4% since this time last year. Though that loss will have been slightly ameliorated by the company's two dividend payments. At the current price, Treasury Wine shares trade on a 4.5% partly franked trailing dividend yield.
So, with shares trading near one-year lows, is the ASX 200 stock a buy, hold, or sell?
We'll take a look at what the analysts at Macquarie Group Ltd (ASX: MQG) recommend below.
But first…
What's been pressuring the ASX 200 wine company?
Treasury Wine shares have tumbled 23.1% since market close on 12 February.
That date is important, because on 13 February, the company released its half-year earnings results.
Highlights for the six months included a 20.2% year on year lift in net sales revenue to $1.54 billion. And net profit after tax, before material items, was up 31.5% to $239.6 million.
But shares closed down 5.7% on the day, with investors appearing disappointed at management's full-year guidance revisions.
The company said it expects FY 2025 earnings before interest and taxes of around $780 million, at the bottom of its previously guided range of $780 million to $810 million. The reduced guidance came amid lower expectations for the company's Treasury Premium Brands.
Amid fresh headwinds, Treasury Wine shares closed down 5.2% yesterday, 15 May, after the company announced that Tim Ford was stepping down as CEO and managing director after five years in that role.
Sam Fischer, currently the CEO of Lion, will replace Ford in late October.
Which brings us back to our headline question.
Should I buy the dip on Treasury Wine shares?
Macquarie's analyst ran their slide rule over Treasury Wine shares following yesterday's announcement of CEO Ford's pending departure.
The analysts noted that incoming CEO Fischer "has been with Lion for three years, and prior to that spent 15 years with global alcohol group Diageo".
According to Macquarie:
While unexpected, we see the new appointment as a positive given the new CEO's history. Nonetheless, this raises uncertainty on current management's strategy, and particularly the medium-term outlook for the key Penfolds segment.
Given timing of the new CEO's commencement, we do not expect a material update on strategy in the near-term.
And all of this is stirring up a lot of uncertainty that's making the broker a bit uncomfortable.
Macquarie noted:
Alongside the change in management, we see increased uncertainty on the outlook across the group's segments. Given this uncertainty, we see risks as more balanced and await greater comfort on strategy following management transition.
With this in mind, Macquarie downgraded Treasury Wine shares to a neutral rating with a 12-month target price of $8.90 per share. That's 3.5% above current levels, not including upcoming dividends.
