Market Punishes Winemaker As Inflation Soils Layer Cake Producer's Results. An Analyst Sees Challenges To Continue In FY23 - Vintage Wine Estates (NASDAQ:VWE)

Telsey Advisory Group analyst Joseph Feldman downgraded Vintage Wine Estates Inc VWE rating to Market Perform from Outperform and lowered the price target to $6 from $12.
The downgrade has happened due to the challenges lapping tough comparisons from the last two years fueled by elevated demand during the pandemic supported by U.S. government stimulus, the reopening of the economy resulting in more consumers visiting wineries, hosting events, and participating in social gatherings and acquisitions.
The analyst said that a deteriorating macroeconomic environment for the consumer with high inflation and rising interest rates also contribute to the re-rating.
Feldman added the persistent supply chain challenges and a lack of visibility on the underlying financials as causes for the downgrade.
He pinpointed that Vintage Wine missed on adjusted EBITDA in Q4 FY22 because of the higher supply chain, labor, and acquisition integration costs.
Also, the gloomy outlook of FY23 sales ranging between $300 million - $310 million against an estimate of $330 million resulted from economic uncertainty.
The analyst regards FY23 will be challenging for the company as it embarks on a path to sales normalization, compounded by a tough macro environment and ongoing cost pressures.
Price Action: VWE shares are trading lower by 38.93% at $3.38 on the last check Wednesday.
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