Treasury Wines share price lifts ahead of share buyback announcement
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More news: Treasury Wines’ share price has lifted after the winemaker said it would announce a share buyback of 5% of issued capital as a part of its financial year 2025 results update in August.
After opening 5% higher, Treasury Wines’ share price had pared gains by 12:19pm AEST having lifted 1.6% to $8.20.
Treasury Wine to announce on-market share buyback, loosens FY26 guidance
The news: Treasury Wine Estates intends to announce an on-market share buyback as a part of its financial year 2025 results update in August, acting on the board’s belief that the stock is “materially undervalued”.
The numbers: Treasury Wine expects to announce a share buyback of 5% of issued capital. Its share price last closed at $8.07 and the company has a market capitalisation of $6.54 billion.
The context: The pre-emptive announcement was made in an investor update on Monday, in which the company confirmed that the buyback would be in line with its longstanding capital management framework.
RBC Capital Markets analyst Michael Toner said in a research note that “on market buyback in F26 is positive provided it can be supported by F26 [free cash flow] generation and TWE is able to maintain ~2x leverage level per company commentary”.
Treasury Wines also downgraded its financial year 2026 earnings before interest and tax expectations for the Penfolds business portfolio and said its Treasury America is expecting “modest” growth amid “economic uncertainty and weaker consumer demand”.
Penfolds’ EBITS growth expectations was revised from “approximately 15%” to “low to mid double-digits”, although Toner said a downgrade was “anticipated by the market”.
Meanwhile, the Treasury Americas Luxury portfolio brand DAOU is expected to have net surplus ratio growth that is “below the low double-digit medium-term target in F26”.
Treasury Wine also reiterated that EBITS for FY25 is expected to be approximately $770 million and that the Treasury Premium Brands’ second-half EBITS performance is “expected to be moderately ahead of guidance”.
The source: ASX
