Treasury Wine Estates faces potential downside risks, including the possible scrapping of its first-half dividend payment, according to Morgans analyst Belinda Moore. While the settlement of a dispute with its former Californian distributor, RNDC, is viewed positively, concerns linger over the company’s financial position. Treasury Wine Estates is a global wine company that owns a portfolio of brands, including Penfolds, Wolf Blass, and Beringer. It is one of the world’s largest wine companies, with a significant presence in Australia, the Americas, Europe, and Asia.
Moore stated, “Its leverage ratios are too high, and material earnings uncertainty remains. For this reason, we don’t expect the board to declare an interim dividend.” The company is scheduled to report its financial results on Monday, adding to the anticipation surrounding its dividend decision.
Treasury Wine shares experienced a surge of 6.2 per cent to $5.49 in early trading on Tuesday. This followed the company’s disclosure that its earnings for the first half of 2025-26 are projected to be around $236 million. This figure marginally exceeds the previously outlined range of $225 million to $235 million, announced on December 17.
RBC Capital Markets analyst Michael Toner noted that the increased guidance “reflects a slightly stronger” trading performance in the two weeks following the December announcement. However, Toner also highlighted potential uncertainties arising from the company’s plan to on-sell inventory acquired from RNDC to other customers, given the existing oversupply challenges in the US market.
