Treasury Wine Estates is set to record a non-cash impairment of at least $687 million on its US goodwill, according to RBC Capital Markets analyst Michael Toner. The impairment reflects ongoing challenges within the US wine market and reduced long-term earnings growth assumptions. Treasury Wine Estates is a global wine company that owns a portfolio of brands, including Penfolds, Wolf Blass, and Beaulieu Vineyard. It is listed on the Australian Securities Exchange.
Toner highlighted that while brands such as Daou, Frank Family, and Matua are experiencing above-market growth, overall softness in US wine trends has dampened expectations for future earnings. This development signals increasing pessimism regarding the Americas market. Toner also suggested the company may have overpaid for its US acquisitions, contributing to the substantial impairment charge.
The analyst also noted that Treasury Wine could reveal additional impacts on other assets as the situation develops. Despite the significant impairment, RBC Capital Markets maintains an “outperform” rating for Treasury Wine Estates, setting a target price of $9.80.
In response to the news, shares in Treasury Wine Estates experienced a decline of 2.8 per cent during morning trade on the ASX. Investors are closely watching the company’s response and future strategies in light of these challenges in the US market.
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