Treasury Wine Estates Ltd (ASX: TWE) shares are limping through a brutal year. The ASX 200 shares have been under constant pressure as investors digest softer sales and a procession of downgrades.
Treasury Wine shares are trading at $5.49 apiece at the time of writing. That sees the stock down 51.4% this year and at levels that remain at 10-year lows.
For some context, the S&P/ASX 200 Index (ASX: XJO) gained 6.6% in 2025.
Structural headwinds in China and US
The drop is painful for a prestigious 68-year-old company that is known for premium wine labels such as Penfolds, 19 Crimes and Lindeman's, which are sold in more than 70 countries around the world.
Treasury Wines' fall reflects not just short-term noise but structural headwinds. The company's board has flagged distribution challenges in key markets, such as the US.
Another strategically important market, China, has recovered more slowly than expected despite the easing of trade hurdles in 2024. Trade and geopolitical shifts, particularly in the US, add to the company's challenges.
Paused buyback program
Those setbacks have led to earnings downgrades, the withdrawal of formal earnings guidance from the company and a pause to the company's $200 million buyback program.
These moves have shaken investor confidence, and as a result, the share price has suffered significantly.
The 40 cents per share in partly franked dividends that Treasury Wine paid over the full year will only compensate its shareholders modestly for their share price losses. At the current share price, Treasury Wine shares trade on a dividend yield of 7.3%.
What next for Treasury Wine shares?
Analysts have responded with varying degrees of caution, and recent broker notes show some downgrades. However, most analysts see Treasury Wine shares as positive, with a 'hold', 'buy' or even 'strong buy' recommendation.
TradingView data shows that the most optimistic analysts expect Treasury Wine shares to climb as high as $9.90, which implies 80% upside at the time of writing. The average share price target for the next 12 months is $7.37 and that still suggests a possible gain of almost 17%.
Analysts at Morgans recently retained the hold rating for the wine stock and set a $6.10 price target for the next 12 months.
The broker noted:
We suspect that trading has been weaker than expected and wouldn't be surprised if consensus is too high. The 1H26 result will be particularly weak. We have made large revisions to our forecasts and stress that earnings uncertainty remains high. Consequently, we maintain a HOLD rating.
