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    Why Treasury Wine Estates (ASX:TWE) Is Down 10.5% After New Cost-Cut Plan And Guidance Withdrawal

    Simply Wall St·12/19/2025 00:33:43
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    • Earlier this month, Treasury Wine Estates launched its TWE Ascent transformation program, targeting A$100.00 million in annual cost savings, cancelling its A$200.00 million share buyback, and withdrawing fiscal 2026 earnings guidance amid weaker luxury wine demand and inventory issues in the US and China.
    • The new CEO, Sam Fischer, is reshaping the group with a smaller, leaner operating model that prioritises brand protection for Penfolds, balance sheet flexibility, and potential asset sales over previous growth and capital return ambitions.
    • We’ll now examine how TWE Ascent’s A$100.00 million annual cost-cut plan reshapes Treasury Wine Estates’ pre-existing investment narrative and expectations.

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    Treasury Wine Estates Investment Narrative Recap

    To own Treasury Wine Estates today, you need to believe its core Penfolds franchise and premiumisation focus can work through weak luxury demand in the US and China, while a new management team tightens costs and inventory. The key near term catalyst is execution of TWE Ascent’s A$100.00 million cost-out and brand protection plan, while the biggest risk is that soft luxury demand and excess stock linger longer than expected, muting the benefits of any reset.

    The most relevant recent move here is the cancellation of the A$200.00 million share buyback, with capital now directed toward balance sheet flexibility, lower leverage and absorbing weaker earnings as shipment cuts flow through. That step, together with the withdrawal of fiscal 2026 guidance and focus on asset reviews, effectively pauses the prior capital return story and puts operational delivery and margin repair at the centre of the investment case.

    Yet while TWE Ascent targets cost savings, investors should be aware that elevated luxury inventories and softer US and China demand could still...

    Read the full narrative on Treasury Wine Estates (it's free!)

    Treasury Wine Estates' narrative projects A$3.3 billion revenue and A$605.8 million earnings by 2028. This requires 3.6% yearly revenue growth and about A$168.9 million earnings increase from A$436.9 million today.

    Uncover how Treasury Wine Estates' forecasts yield a A$7.48 fair value, a 51% upside to its current price.

    Exploring Other Perspectives

    ASX:TWE 1-Year Stock Price Chart
    ASX:TWE 1-Year Stock Price Chart

    Ten fair value estimates from the Simply Wall St Community span roughly A$5.90 to A$14.34, showing how far apart views on TWE really are. As you weigh those against TWE Ascent’s cost cutting focus and ongoing China and US demand risks, it can be helpful to compare several of these independent perspectives before deciding how this reset might affect future performance.

    Explore 10 other fair value estimates on Treasury Wine Estates - why the stock might be worth just A$5.90!

    Build Your Own Treasury Wine Estates Narrative

    Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

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    This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.