Earnings losers: TWE, GMG, SUN and more fall on weaker profits

Morning Star AU

Feb 23

Following my article on this week’s earnings winners, it is only right we cover the losers and the ones that fall somewhere in between. The past week has seen some heavy handed responses from the ...

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The past week has seen some heavy handed responses from the ...</p>\n\n<a href=\"https://www.morningstar.com.au/stocks/earnings-losers-twe-gmg-sun-more-fall-weaker-profits\">Source Link</a>\n\n</div>\n","source":"morningstar_stock","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Earnings losers: TWE, GMG, SUN and more fall on weaker profits</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nEarnings losers: TWE, GMG, SUN and more fall on weaker profits\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-02-23 00:00 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.morningstar.com.au/stocks/earnings-losers-twe-gmg-sun-more-fall-weaker-profits><strong>Morning Star AU</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>Following my article on this week’s earnings winners, it is only right we cover the losers and the ones that fall somewhere in between. The past week has seen some heavy handed responses from the ...</p>\n\n<a href=\"https://www.morningstar.com.au/stocks/earnings-losers-twe-gmg-sun-more-fall-weaker-profits\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"SUN","symbol_name":"太阳石油","start_time":0,"source_url":"https://www.morningstar.com.au/stocks/earnings-losers-twe-gmg-sun-more-fall-weaker-profits","article_id":"2613732269","we_media_id":null,"thumbnails":[],"rights":{"source":"morningstar_stock","url":"https://www.morningstar.com.au/stocks/earnings-losers-twe-gmg-sun-more-fall-weaker-profits","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2613732269","pubTimestamp":1771776000,"columns":[],"sourceInfo":{"source_id":"morningstar_stock","name":"Morning Star"},"weMediaInfo":null,"summary":"Following my article on this week’s earnings winners, it is only right we cover the losers and the ones that fall somewhere in between. The past week has seen some heavy handed responses from the mark","collect":0,"end_time":0,"defaultTopTitle":"morningstar.com.au","property":["earning"],"viewcount":null,"language":"en","relate_stocks":{"SUN":"太阳石油"},"translate_title":"盈利输家：TWE、GMG、SUN等因利润疲软而下跌","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SUN":1.5},"content_text":"Following my article on this week’s earnings winners, it is only right we cover the losers and the ones that fall somewhere in between. The past week has seen some heavy handed responses from the market. Particularly when a company has failed to meet market expectations. The losers saw greater share price volatility following their result. However, our analysts in each case maintained their fair value estimates. This week’s losers Treasury Wine Estates (ASX.TWE) Fair Value Estimate: $8.50 (43% discount at 23 February) Rating: ★★★★★Moat: None TWE’s share price fell 4.75% on the day of its highly anticipated interim report. Underlying EBIT of $236 million was 40% lower year on year. Weaker earnings were the results of reduced Penfolds shipments to China and sluggish US demand. In response the company suspended its dividend. Treasury Wines also took a $988 million pretax impairment to its US assets. The US business is far less profitable than originally forecast, so TWE has written down the value of “goodwill” to reflect this. Our analyst Angus Hewitt maintains his $8.50 fair for TWE, reiterating that the shares are undervalued. Angus notes that after a series of negative updates, he believes the market is overly pessimistic. Destocking will protect brand equity and pricing power for TWE’s stronger brands such as Penfolds. You can read more on Angus’s note here. Suncorp (ASX.SUN) Fair Value Estimate: $16 (5% discount at 23 February) Rating: ★★★Moat: None Suncorp shares fell 5% as investors reacted to a steep fall in cash profits for the insurer. The company reported a half-yearly profit of $263 million, a 76% reduction in comparison to last year. The fall in earnings is primarily due to volatile natural hazard costs which blew out $453 million above allowances. The interim dividend was cut by 59% to $0.17. Our analyst Nathan Zaia maintained his fair value estimate despite the volatile result. Suncorp’s full year guidance implies a 4% growth in written premiums which is primarily driven by higher prices. Nathan believes the premium increases should stick without risking customers switching, given inflationary pressures are industry wide. Following the selloff, Nathan noted Suncorp is now modestly undervalued. You can read more on Nathan’s note here. Goodman Group (ASX.GMG) Fair Value Estimate: $29 (4% premium at 23 February) Rating: ★★★Moat: Narrow Following the first half result, Goodman shares fell as much as 7% intraday before closing down 4%. Goodman’s first-half operating profit per security fell 8% year on year to 59 cents. The fall in profitability was driven by lower transactional and performance fees. Goodman’s development earnings are expected to be skewed to the second half of the year. Full year guidance reiterated operating earnings growth of 9% and distributions of 30 cents per security. I had a chance to interview our analyst Yingqi Tan prior to the result. Yingqi noted she was primarily focused on Goodman’s ability to meet its 9% earnings target. In addition, she was also focused on progress in the $17 billion development pipeline. Following the result, Yinqi noted the result largely met her expectations and maintained her fair value of $29. However, the timeline for building out the data center pipeline is still somewhat unclear. The group plans to start building 0.5 gigawatts by June 2026. Yinqi estimates this will take until 2028 to finish. Wesfarmers (ASX.WES) Fair Value Estimate: $58 (45% premium at 23 February) Rating: ★Moat: Wide Wesfarmers shares fell 5.3% after reporting results. Wesfarmers’ first half net profit rose 9% to $1.6 billion. The profit drivers were a 3% growth in sales and improved margins from Bunnings and Kmart. The dividend per share rose 7% to $1.02 (fully franked). Our analyst Johannes Faul maintained his fair value of $58 per share. Johannes noted that the near term outlook for consumer spending is worsening. However, both Kmart and Bunnings are well positioned. Their low prices should resonate with customers if cost of living pressure continue to rise. Wesfarmers shares are materially overvalued even after the fall following the result. Johannes believes the market is overinflating the growth potential for its existing operations. Where the market was indifferent Westpac (ASX.WBC) Fair Value Estimate: $31 (38% premium at 23 February) Rating: ★★Moat: Wide The market was split on Westpac’s first quarter with the share price down 1% on the day. The bank reported net profit after tax of $1.9 billion, up 6% from the prior two quarters. The main profit driver was a 5% drop in operating expenses. Westpac also saw home loans growing ahead of the market. This is in stark contrast to previous quarters which saw Westpac losing ground. Our analyst Nathan Zaia increased the fair value by 2% to $31 citing adjustments to short term earnings. Overall, Westpac remains materially overvalued trading 30% above fair value. Nathan reiterated that he doesn’t see a sufficient margin of safety for the bank amid potential risks of higher credit stress, lower profit margins and executing a complex technology simplification project. You can read more on Nathan’s note here. BlueScope Steel (ASX.BSL) Fair Value Estimate: $30.50 (8% discount at 23 February) Rating: ★★★Moat: NoneThe market had a mixed reaction to BlueScope’s first half result, finishing the day down 2%. BSL reported underlying EBIT of $558 million which has doubled from last year. The earnings growth was primarily driven by higher spreads in its US minimill, Northstar. Shortly after the result, Bluescope received an improved takeover offer from the consortium of Steel Dynamics and Seven Group holdings. Our analyst Esther Holloway noted the result was in line with expectations however second half guidance was higher than her forecasts. The fair value following the result remained unchanged however it has since increased following the improved takeover offer. The current $30.50 fair value incorporates a 75% chance of takeover. Esther noted that if BSL is not taken over, the stand alone fair value would fall to $24 per share. This implies a significant premium for the current takeover bid. You can read more on Esther’s note here. Get Morningstar’s insights in your inbox","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"-1","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"}}}