The Treasury Wine Estates Ltd (ASX: TWE) share price has had a brutal year.
Once trading above $11, the stock is now changing hands around $5.20. That puts it down roughly 54% in 2025, making it one of the worst performers in the S&P/ASX 200 Index (ASX: XJO).
For a company behind some of the world's best-known wine brands, including Penfolds, that kind of fall is hard to ignore.
So, let's take a closer look and see whether the market has gone too far and if a recovery could be on the cards in 2026.
Image source: Getty Images
What went wrong?
Several challenges have come together this year, putting pressure on both the business and the share price.
In October, Treasury Wine withdrew its full-year earnings guidance after sales came in weaker than expected in China and distribution issues emerged in the US. The company also paused its share buyback. Without clear earnings guidance, investor confidence weakened and the share price fell about 14%.
Soon after, the company announced a large non-cash write-down of around $687 million on its US assets. This reflected weaker demand and lower long-term growth expectations in America's wine market. Management also pointed to challenges integrating past acquisitions, including Frank Family and DAOU.
More recently, Treasury Wine said trading conditions across the global wine category have softened in its two biggest export markets, China and the US. Distributor inventory levels remain higher than ideal, which has weighed on near-term demand. In China, parallel imports have added further pressure, particularly across parts of the premium Penfolds range, making it harder for prices to hold up.
Why a recovery might be brewing
Treasury Wine is not a small or struggling business. It is one of the world's largest wine companies, with brands ranging from everyday labels through to high-end wines. While demand has softened in the short term, premium wines, particularly Penfolds, have continued to hold up better than lower-priced products in some markets.
The company has also launched a program called TWE Ascent, which is focused on cutting costs, improving efficiency, and sharpening the mix of brands it sells. Management expects this to deliver meaningful savings over time and help lift profitability as conditions improve.
A change in leadership could also play a role. Sam Fischer, who previously held senior roles at Lion and Diageo, took over as CEO during a difficult period.
And there has also been renewed interest from large investors. French billionaire Olivier Goudet recently bought a 5% stake in Treasury Wine. Given his background in consumer brands and wine, his investment suggests he sees value at current prices and believes the business can recover.
Is it a 'buy' for 2026?
At current prices, the market appears to be assuming Treasury Wine's earnings will stay below past levels for a while. However, if conditions begin to improve, with stronger growth returning in China and US operations settling, its shares could lift quickly.
The share price looks weak today, but that low starting point supports the recovery case for 2026. If management can improve inventory levels, cut costs and make better use of its global brands, this heavily sold-off stock could surprise on the upside as confidence returns.
There are still risks and a turnaround is not guaranteed. Even so, Treasury Wine's well-known global brands give it a stronger base than many struggling companies. If trading conditions stabilise, the share price could regain interest among investors.
