Treasury Wine Estates is facing increased scrutiny regarding its growth prospects in China, according to Citi analyst Sam Teeger. Following the company’s recent profit announcement, Teeger has expressed concerns about the achievability of its financial targets, particularly in the Chinese market. Treasury Wine Estates is a global wine company that owns a portfolio of brands, including Penfolds. The company is involved in viticulture, winemaking, and distribution.
Teeger highlighted a shift in alcohol consumption patterns observed since June. This shift involves a move away from large-scale banquets towards smaller-scale gatherings. This change has led to a softening in depletion trends throughout June and July. According to Teeger, this trend may not bode well for the company’s exit run rate into the 2026 financial year.
Citi’s industry research over the past year has prompted increased caution regarding Treasury Wine Estates’ ability to meet its Penfolds guidance for FY26 and FY27. The analyst believes that the weakness in China’s economic environment is a contributing factor to these concerns. Teeger suggests that the company’s increasingly cautious tone regarding the region may lead some investors with optimistic views on China to adjust their growth expectations.
The analyst’s commentary points to potential challenges for Treasury Wine Estates in navigating the evolving Chinese market. The shift in consumer behaviour and the broader economic conditions in China are key factors influencing the company’s outlook.
