Shares of the UK-based Diageo PLC (GB:DGE) surged 4.6% as of writing after the company released a brief trading update before its 2024 AGM (annual general meeting) today. In its statement, the company warned of ongoing weakness in the global alcoholic drinks market but kept its expectations unchanged.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 55% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Diageo owns around 200 well-known brands, including Baileys, Smirnoff, Tanqueray, and Guinness.
Diageo Warns of Tough Conditions Ahead
Diageo warned that the global trading conditions remain tough for the company as well as the industry. The company stated that it remains committed to driving its business through higher productivity and investments despite cautious customer spending.
In the medium term, Diageo is targeting organic net sales growth between 5% and 7%. Additionally, it expects organic operating profit to grow in line with net sales with continued investments in its business. In the long term, it aims to achieve organic operating profit growth that outpaces organic net sales growth.
Is Diageo a Good Share to Buy?
Overall, analysts hold a moderately optimistic view of the stock, as the company indicated that it expects challenges to persist into FY25. Year-to-date, DGE stock has lost over 7% in trading. Moving ahead, the Diageo share price target is 2,703.36p, which indicates a modest upside of 3.6% from the current trading levels.
According to TipRanks’ consensus, DGE stock has received a Moderate Buy rating based on a total of 14 recommendations from analysts. This includes seven Buy, four Hold, and three Sell recommendations.
