Treasury Wine Estates (ASX:TWE) continues to lose market share across all price points within the US wine category, and faces additional risk given continued US distributor disruption and the company's need to work through material excess channel inventory, Jefferies said in a Tuesday note.
The investment firm issued the note after the release of Nielsen US wine category data for the four weeks to June 13, which showed sales in retail channels declining 3.2% year over year.
Treasury Wine Estates "sharply underperformed" as its brands fell over 11% in value terms, compared with a 3.2% decline for the broader market, and slid 17.5% in volume terms versus a 5.7% broader market decline, the equity research firm said.
The Nielsen data also indicates that the company's luxury portfolio declined 8.2% even as the overall luxury market grew almost 1%, with Treasury Wine's promotional intensity also falling more than the market.
"Our channel checks suggest distributor disruption is a factor, despite [Treasury Wine Estates'] commentary suggesting that California depletions has returned to growth," Jefferies said.
It maintained a hold rating on Treasury Wine with a price target of AU$5.
The company's shares gained 2% in recent Wednesday trade.