TWE are down over 20% so far today on the back of this guidance downgrade. That could be an overreaction (which would be pretty typical for our market) but it could also be the start of worse to come. Downgrades often come in threes. The first is rarely the last. I don't follow TWE closely, but I note they describe US Market conditions as "Challenging" and anything that is China facing seems to be getting sold off on Coronavirus concerns. TWE are really an export story now, and if they are finding those export markets to be "challenging", that's not a good sign.
08-Apr-2020: Strategic review outcomes and COVID-19 update
The big news here is Treasury Wine's update on the outcomes of their strategic review and that they are considering a demerger of the Penfolds business and associated assets into a separate ASX-listed company by the end of 2021.
- Litigation cases stains TWE's reputation putting strain on their future viability
- Penfolds an unsuccessful spin-ff due to various reasons (poor management, funding issues, etc)
- Covid-19's effect on wine production and world trade has long-term effects which severly handicap TWE's world operation
Bottomed out. Now in good value range. Thesis still in tact and Good dividend