Treasury Wine Estates (TWE.AX)

Research evidence excerpt

Vi ewp oint |

15 Sep 2026 06:52:17 ET │ 14 pages

Treasury Wine Estates (TWE.AX)

New LTI plan points to material shift in TWE's strategic priorities

CITI'S TAKE

Our review of the F27 LTI confirms our view that there has been a meaningful

shift in the company’s strategic priorities. The Board has moved away from

rewarding capital efficiency (ROCE) and instead introduced a new Project

Ascent cost-saving metric, which is relatively more subjective. This signals

management's major task over the next three years is no longer optimising

capital returns, but successfully executing the transformation program and

restoring earnings growth. We offer further thoughts on page two of this

report.

Investment view — The strength of Penfolds continues to be underestimated with

its performance continuing to buck industry trends. The US remains relatively more

challenging and it will take time to see the benefits from reductions to US vintages,

but the strategic review remains ongoing with an exit or partial exit more likely in our

view following the recent impairments. Leverage has peaked and should continue to

fall from improvement in cash flow and earnings (from FY28) as well as divestment

proceeds. We are Buy-rated.

n

Buy

Price (15 Sep 26 16:00)

Target price

Expected share price return

Expected dividend yield

Expected total return

Market Cap

A$5.16

A$6.95

34.7%

0.0%

34.7%

A$4,174M

US$2,980M

Price Performance

(RIC: TWE.AX, BB: TWE AU)

Food & Beverage Team

TWE.AU revisions (Y/E Jun)

2025A

2026A

2027E

2028E

2029E

Sam Teeger AC

Sales (A$m)

% revision

EBIT (A$m)

% revision

Core Net Profit (A$m)

% revision

Core EPS (A¢)

% revision

EPS Growth (%)

PE Ratio (x)

Dividend Yield (%)

2,938.1

0.0%

770.3

0.0%

470.5

0.0%

57.7

0.0%

10.8

8.9

7.8

2,561.0

0.0%

492.3

0.0%

275.2

0.0%

33.8

0.0%

-41.4

15.3

0.0

2,248.1

0.0%

492.3

0.0%

273.4

0.0%

33.6

0.0%

-0.5

15.3

0.0

2,332.4

0.0%

529.9

0.0%

315.4

0.0%

38.8

0.0%

15.4

13.3

0.0

2,409.9

0.0%

559.6

0.0%

335.8

0.0%

41.3

0.0%

6.5

12.5

5.4

Eileen Li

Source: Company Reports and dataCentral, Citi Research.