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Top 6 Distillers & Wineries Stock to Buy in 2019
Investor Insights

This summary was created by AI, based on 7 opinions in the last 12 months.

Diageo PLC, the world's largest producer of premium alcoholic beverages, is currently experiencing a challenging period, with its stock hitting a 10-year low and post-COVID revenues stagnating. Analysts have mixed opinions on the company's management, with some highlighting a need for a shift in leadership. While there are indications of potential earnings growth of 7-10% in the coming years, concerns persist regarding declining sales volumes and pricing power, particularly in the spirits segment. Despite these challenges, the company remains focused on high-quality brands and has the financial capacity to invest in top talent. As consumer preferences evolve, emphasizing quality over quantity, Diageo's diversified brand portfolio may provide resilience in a shifting market landscape.

Consensus
Mixed
Valuation
Undervalued
Similar
LVMH,MC
TOP PICK

Largest producer in the world, focused on premium brands. Stock's at 10-year low. Post-Covid revenues have flattened out, but earnings poised to rise. Wall Street's not enamoured with management, but the company can afford to hire the best -- there are rumblings, though no action yet. Cheap valuation of 16x PE. Looking for a return to 7-10% earnings growth. Hoping the stock will be a double over 5 years. Yield is 2.87%.

Things have slowed down in Latin America. Some brands have underperformed. Lots of articles on how alcohol might not be great for you. People may be drinking less, but they're drinking "better". Consumers tend to return to behaviours over time. (The big trans fat scare of 25 years ago has not stopped people from eating french fries.)

(Analysts’ price target is $126.38)
WATCH

Was upgraded yesterday, surprisingly, based on expected more sales in spirits, and a cyclical, not structural decline in alcohol. Watch for DEO's guidance in February, their next report.

DON'T BUY

If you look at the June numbers, sales were down and volumes were down in a lot of places around the world. So spirits are doing very poorly, and it's a higher-priced product. Margin compression. Expectations of 5-7% growth for the second half is over-optimistic.

Needs to restructure into fewer brands. Big issue is that it's not growing as fast as it used to, nor does it have pricing power anymore. Management shakeup has hurt. Stock's fallen a lot, so you could try a value play if you're prepared to hold for a long time.

BUY

Very well managed. Had volume, pricing and inventory issues. Overwhelming healthy messages from government to limit intake. Younger generation doesn't drink as much as older ones. Not expensive, a lot of the negatives are priced in. Yield is just over 4%.

Take a look. Nice, conservative name to own. Potentially undervalued, and could turn around.

COMMENT

The high-end boozemaker is out of touch with the American consumer who is struggling. DEO's top tequila brand used to boast super growth, but is now -22% in the past year; not they have slashed the price of that tequila to adjust.

DON'T BUY

Sales are slipping and their dividend isn't growing despite being a mature company. LVMH offers far better dividend growth, for example.

BUY

He's added at lower levels, a great opportunity. Best in the world at what they do. Sales have been soft, but they have so many of the top brands in the world. When someone like George Clooney comes out with a brand, they buy it and bring it into the distribution network. Will raise dividend and generate earnings growth for many years. Yields around 3%.

PAST TOP PICK
(A Top Pick Nov 01/22, Down 11%)

Disappointing earnings. Hurt in Latin America. General slowing, including US. Core holding. Great company, trades at 19x earnings. 2.8% dividend yield, steady growth over time. Share buybacks. Growth of India's middle class will be a huge driver.

DON'T BUY

On Nov. 10, they issued an operating profit warning, because they're getting killed in Latin America and the Caribbean, because consumers are trading down to cheaper brands. Younger people are drinking less hard alcohol than previous generations, verified by a recent poll. One factor is the legalization of cannabis. Another is that companies have been hiking liquor prices too often. Also, the new weight-loss drugs reduce craving for booze.

HOLD

Neutral on fate of company. Drop in valuation good, but moving towards a fair valuation at current price. Would be good to hold, or wait to buy on weakness. Premium offering of alcoholic spirit selection. 

TOP PICK
By far the largest distributor of alcohol beverages globally. Focusing on premium brands(higher margins). Sales rising which creates good profits. Able to buy emerging brands such as George Clooney's vodka brand. Rebound in travel increasing demand for alcohol. High dividend yield is good for investors. Not worried about looming recession, but high end products/brands won't be affected.
SELL
He sold this. No compelling reason to own it. It recovered with the market and offers reasonable metrics, but there are better stocks--he wants good cash flow to protect him in a downturn. He's getting picky.
SELL
He sold Diageo recently, because it scored poorly in valuation and dividend (decelerating). Consumers may buy fewer of their brands because of hot inflation. He owned this for a long time, but it was time to move on.
PAST TOP PICK
(A Top Pick Jul 28/21, Down 6%) Is the fastest-growing spirits/drinks company now with revenue growth nearing 10%. It carries a huge portfolio of premium brands which are immune to a recession. DEO is a core holding. A world-class business.
TOP PICK
#1 player globally. Focused on higher-end brands in all of the sectors they're in. So they can charge more, and their margins are growing. Spirits are gaining space on the shelf. Organic growth of 4-5%. Beverages are all about distribution, and they have the best. No one like them in the sector. Dividends grow over time. Yield is 1.58%. (Analysts’ price target is $200.07)
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Diageo PLC(DEO-N) Rating

Ranking : 3 out of 5

Bullish - Buy Signals / Votes : 2

Neutral - Hold Signals / Votes : 0

Bearish - Sell Signals / Votes : 2

Total Signals / Votes : 4

Stockchase rating for Diageo PLC is calculated according to the stock experts' signals. A high score means experts mostly recommend to buy the stock while a low score means experts mostly recommend to sell the stock.

Diageo PLC(DEO-N) Frequently Asked Questions

What is Diageo PLC stock symbol?

Diageo PLC is a American stock, trading under the symbol DEO-N on the New York Stock Exchange (DEO). It is usually referred to as NYSE:DEO or DEO-N

Is Diageo PLC a buy or a sell?

In the last year, 4 stock analysts published opinions about DEO-N. 2 analysts recommended to BUY the stock. 2 analysts recommended to SELL the stock. The latest stock analyst recommendation is . Read the latest stock experts' ratings for Diageo PLC.

Is Diageo PLC a good investment or a top pick?

Diageo PLC was recommended as a Top Pick by on . Read the latest stock experts ratings for Diageo PLC.

Why is Diageo PLC stock dropping?

Earnings reports or recent company news can cause the stock price to drop. Read stock experts’ recommendations for help on deciding if you should buy, sell or hold the stock.

Is Diageo PLC worth watching?

4 stock analysts on Stockchase covered Diageo PLC In the last year. It is a trending stock that is worth watching.

What is Diageo PLC stock price?

On 2025-03-17, Diageo PLC (DEO-N) stock closed at a price of $109.29.