TD Cowen analyst Robert Moskow maintained a Hold rating on Diageo today and set a price target of p1,775.00.
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Robert Moskow has given his Hold rating due to a combination of factors affecting Diageo’s performance. The company reported a sales beat in the first quarter but subsequently lowered its sales and EBIT guidance, citing weak demand trends in key markets such as the U.S. and China. This revision, coming so early in the fiscal year, reflects an uncertain demand environment and raises concerns about the company’s ability to meet its growth targets.
Additionally, Diageo faces challenges in the U.S. spirits market, particularly with tequila, where sales have declined significantly due to increased competition and consumer trade-down. In China, anti-extravagance policies have negatively impacted baijiu sales, further straining profitability. Although the company is on track with its cost-saving initiatives, these negative market dynamics and the lack of updates on the CEO search contribute to the cautious Hold rating.
In another report released yesterday, RBC Capital also maintained a Hold rating on the stock with a £22.00 price target.