Trevor Stirling, an analyst from Bernstein, maintained the Buy rating on Diageo (DGEAF – Research Report). The associated price target is p3,580.00.
Trevor Stirling has given Diageo a Buy rating due to a combination of factors including a cautious yet promising outlook on sales and profitability. Despite the slight downturn in organic sales and EBIT expected for the first half of FY24, the analyst sees an improvement in the underlying trends, especially in the crucial US market. Furthermore, there is an anticipation of rebounded growth to around 7% in FY25, alongside a modest improvement in profit margins.
The rationale behind the Buy rating also takes into account Diageo’s valuation, which, despite the company facing certain challenges, does not imply significant downside risk. The sector’s overall modest expectations and potential for re-rating if Diageo successfully implements its strategic initiatives bolster the analyst’s positive stance. Moreover, the stock is still trading at a premium compared to its large-cap peers, indicating inherent market confidence in Diageo’s value proposition.
According to TipRanks, Stirling is a 4-star analyst with an average return of 5.2% and a 61.02% success rate.
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Diageo (DGEAF) Company Description:
Diageo Plc engages in the production and distribution of alcoholic beverages. Its brands include Johnnie Walker, Crown Royal, JeB, Buchanan’s, Windsor and Bushmills whiskies, Smirnoff, Ciroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, Tanqueray, and Guinness. It operates through the following geographical segments: North America; Europe and Turkey; Africa; Latin America and Caribbean; Asia Pacific; ISC; and Corporate and Other. The company was founded on October 21, 1886 and is headquartered in London, the United Kingdom.
Read More on DGEAF:
- Diageo price target lowered to 2,380 GBp from 2,600 GBp at Morgan Stanley
- Diageo price target lowered to 2,450 GBp from 2,470 GBp at Deutsche Bank
- Diageo Settles Legal Battle with Diddy
- Diageo named short-term sell idea at Deutsche Bank
- Diageo downgraded to Underperform from Neutral at Exane BNP Paribas
