Treasury Wine Estates Ltd (ASX: TWE) shares have had a tough year.
At the current share price, they are down roughly 50% from a 52-week high of $9.18.
While there is still a lot of work to be done, when I look at where things stand today, I think this is one worth considering.
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A business going through a reset
There is no getting around the fact that the last year has been difficult for the wine giant.
Earnings pressure, weaker demand in some markets, and broader industry challenges have all weighed on performance. That has also impacted dividends, with the market currently expecting no payout in FY26.
That may understandably put some income investors off in the short term.
However, I think it is important to separate what is happening now from where the business could be heading.
An update this week points to improving momentum in some key markets. Depletions have returned to growth in the US and remain strong in China, while the company is also rolling out changes to improve execution.
If that continues, the earnings profile could begin to rebuild from here.
Income potential returning over time
Looking ahead, dividend expectations start to recover.
According to CommSec, consensus estimates point to partially franked dividends of 15 cents per share in FY27 and 24 cents per share in FY28.
At the current share price, that would imply a forward dividend yield of around 3.3% in FY27, rising to over 5.3% in FY28, before considering franking credits.
That is where I think the opportunity starts to become more interesting.
You are not buying this for immediate income. You are buying it with the expectation that income returns as the business recovers.
There is more than just income here
I also do not think this is purely an income story.
Treasury Wine Estates still owns a portfolio of premium brands, with Penfolds remaining a key driver. There are also signs of improving demand in markets like China, alongside better momentum in the US.
At the same time, the company is restructuring its operations, which could support margins and efficiency over time.
There is also the balance sheet to consider. Recent refinancing activity has strengthened liquidity, giving the company greater flexibility as it navigates this period.
When I put that together, I see an ASX dividend stock trying to reset rather than one in decline.
Foolish takeaway
Treasury Wine Estates is not the simplest ASX dividend stock to buy right now.
There may be no income in FY26, and it may take time for earnings to rebuild.
But looking further ahead, dividends are expected to return and grow, and the share price is already reflecting a lot of the recent challenges.
For investors who are willing to be patient, I think this could be a dividend stock worth considering after a 50% sell-off.
