Treasury Wine Estates Ltd (ASX: TWE) shares are slipping today.
Shares in the S&P/ASX 200 Index (ASX: XJO) global wine company closed yesterday trading for $6.06. In early afternoon trade on Friday, shares are changing hands for $6.03 apiece, down 0.5%.
For some context, the ASX 200 is up 0.4% at this same time.
Treasury Wine shares have also materially underperformed the ASX 200 over the past year. While the benchmark index has gained 9.4% over 12 months, Treasury Wine stock has plunged by 46.9%.
And the 40 cents per share in partly franked dividends the company paid out over this time won't do much to ease those losses. The stock currently trades on a partly franked trailing dividend yield of 6.6%.
Which brings us back to our headline question.
Image source: Getty Images
Should you buy the big dip on Treasury Wine shares?
Sequoia Wealth Management's Peter Day anticipates a brighter outlook for the ASX 200 wine company. But he's not ready to pull the trigger just yet (courtesy of The Bull).
"The global wine giant recently withdrew group earnings before interest and tax growth guidance in fiscal year 2026 due to an uncertain outlook in relation to Penfolds and Treasury Americas," said Day, who has a hold recommendation on Treasury Wine shares.
"The company also paused its on-market share buyback until there's more clarity around trading conditions and expectations," he added.
As you'd expect, that news saw investors overheating their sell buttons.
"The shares fell from $6.98 on October 10 to close at $5.93 on October 13. The shares have modestly improved to trade at $6.14 on October 23," Day noted.
As for his hold recommendation, Day concluded, "At these price levels, we retain a neutral rating in anticipation of a brighter outlook, but acknowledge challenges lay ahead."
What's been happening with the ASX 200 wine company?
Treasury Wine shares closed up 1.2% after the company reported its full-year FY 2025 results on 13 August.
That was spurred by a 7.2% year-on-year increase in net sales revenue to $2.9 billion. And on the bottom line, net profit after tax (NPAT) was up 15.5% to $470.6 million. Management also used the occasion to announce an on-market share buyback of up to $200 million.
However, as Day mentioned above, the company paused that buyback on 13 August.
As for the withdrawal of the FY 2026 earnings guidance that saw Treasury Wine shares getting hammered, management had previously been guiding for low-to-middle-double-digit EBITS growth for its Penfolds segment.
