Treasury Wine Estates Limited Just Missed EPS By 62%: Here's What Analysts Think Will Happen Next

It's been a good week for Treasury Wine Estates Limited (ASX:TWE) shareholders, because the company has just released its latest annual results, and the shares gained 5.0% to AU$12.35. Statutory earnings per share fell badly short of expectations, coming in at AU$0.13, some 62% below analyst forecasts, although revenues were okay, approximately in line with analyst estimates at AU$2.8b. The analysts typically update their forecasts at each earnings report, and we can judge from their estimates whether their view of the company has changed or if there are any new concerns to be aware of. With this in mind, we've gathered the latest statutory forecasts to see what the analysts are expecting for next year.

See our latest analysis for Treasury Wine Estates

Following the latest results, Treasury Wine Estates' 15 analysts are now forecasting revenues of AU$3.12b in 2025. This would be a notable 11% improvement in revenue compared to the last 12 months. Statutory earnings per share are predicted to bounce 397% to AU$0.61. Yet prior to the latest earnings, the analysts had been anticipated revenues of AU$3.11b and earnings per share (EPS) of AU$0.62 in 2025. The analysts seem to have become a little more negative on the business after the latest results, given the minor downgrade to their earnings per share numbers for next year.

It might be a surprise to learn that the consensus price target was broadly unchanged at AU$14.06, with the analysts clearly implying that the forecast decline in earnings is not expected to have much of an impact on valuation. It could also be instructive to look at the range of analyst estimates, to evaluate how different the outlier opinions are from the mean. The most optimistic Treasury Wine Estates analyst has a price target of AU$16.00 per share, while the most pessimistic values it at AU$11.50. This shows there is still a bit of diversity in estimates, but analysts don't appear to be totally split on the stock as though it might be a success or failure situation.

Looking at the bigger picture now, one of the ways we can make sense of these forecasts is to see how they measure up against both past performance and industry growth estimates. For example, we noticed that Treasury Wine Estates' rate of growth is expected to accelerate meaningfully, with revenues forecast to exhibit 11% growth to the end of 2025 on an annualised basis. That is well above its historical decline of 2.1% a year over the past five years. By contrast, our data suggests that other companies (with analyst coverage) in the industry are forecast to see their revenue grow 7.1% per year. So it looks like Treasury Wine Estates is expected to grow faster than its competitors, at least for a while.

The Bottom Line

The biggest concern is that the analysts reduced their earnings per share estimates, suggesting business headwinds could lay ahead for Treasury Wine Estates. Fortunately, they also reconfirmed their revenue numbers, suggesting that it's tracking in line with expectations. Additionally, our data suggests that revenue is expected to grow faster than the wider industry. There was no real change to the consensus price target, suggesting that the intrinsic value of the business has not undergone any major changes with the latest estimates.

Following on from that line of thought, we think that the long-term prospects of the business are much more relevant than next year's earnings. We have estimates - from multiple Treasury Wine Estates analysts - going out to 2027, and you can see them free on our platform here.

It is also worth noting that we have found 3 warning signs for Treasury Wine Estates (1 shouldn't be ignored!) that you need to take into consideration.

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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.