Mr Davenport reported the incident to police.
Sergeant Kate Pirovano, of Queenstown, said police were calling for anyone with any information to come forward.
The sheep were killed on Saturday at 10.30am when Mr Davenport was moving 280 ewe hoggets between opposite paddocks on Littles Rd, which runs down from the junction with the Coronet Peak ski area road.
Mr Davenport said he was putting warning lights up and had proper signs displayed when the driver, who he suspected was a local man, came speeding down the blind gully in a black Subaru station wagon at up to 130kmh, braked then skidded into the scattering stock in the 80kmh zone.
"One sheep went 15 feet [5m] in the air. How he didn't kill more I don't know," he said.
One sheep's neck was broken, the other's spine was fractured.
Mr Davenport said he suspected the two injured animals both had broken legs, and he would try and save them.
"The annoying thing is that he didn't have the decency to stop and then he just gunned it, so he obviously had something to hide."
A neighbour and witness was waiting on the other side of the moving stock and managed to get a partial reading of the car's number plate, which has been forwarded to police.
Mr Davenport, who has been farming the area since 1962, said there were some mad drivers who went through the area "like a bullet - they come down the wrong side of the road".
This is not the first time he has lost stock in a hit-and-run.
About 20 years ago a male driver killed 24 sheep in a similar incident near Arrowtown and he thinks people just "don't take any notice" of warning signs on rural roads - something he puts down to the abundance of warning signs and flashing lights accompanying roadworks.
"I have a big concern about people's attitudes to stock on the roads. We have flashing lights and signs but people don't seem to take any notice ... it's a real hassle getting stock from A to B," he said.
Federated Farmers Otago president Michael Lord could not comment on the case as it was under police investigation but said he thought stock hit-and-runs were "a reasonably infrequent occurrence".
Mr Lord urged farmers and drivers to remain vigilant on rural roads and be wary of the unexpected.
