Treasury Wine Estates Ltd (TWE.AU) saw its shares plummet 5.25% during intraday trading on Friday, following a bearish analyst note that raised significant concerns about the company's outlook.

The sharp decline came after UBS downgraded the vintner to sell from neutral, citing a significantly challenged industry backdrop with falling demand for alcohol, especially wine. The bank highlighted headwinds from Treasury Wine's skew toward California in its U.S. business, where tourism has softened, and expressed concern over the company's elevated gearing. UBS expects Treasury Wine's net debt-to-Ebitda ratio to rise and does not anticipate any dividends from the first half of fiscal 2026 through the end of fiscal 2027.

UBS also cut its price target for Treasury Wine Estates by 9.5% to A$4.75 per share, reflecting the analyst's increased pessimism about the company's financial prospects amid current market conditions.