TD Cowen analyst Robert Moskow has maintained their neutral stance on DGEAF stock, giving a Hold rating today.
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Robert Moskow has given his Hold rating due to a combination of factors impacting Diageo’s current and future performance. The company’s new Accelerate program, which aims to cut $500 million in annual costs by 2028, is seen as a pragmatic response to the weak demand environment and uncertain recovery timeline. This initiative is expected to enhance cash flow generation and improve operating leverage by focusing on cost savings and supply chain efficiencies.
However, the timeline for recovery in the U.S. spirits market remains uncertain, with management acknowledging cyclical weaknesses but not committing to a specific recovery period. While the company is confident in the underlying industry fundamentals, there are concerns about structural challenges such as moderation trends and increased cannabis use. These factors contribute to the cautious outlook, justifying the Hold rating as the company navigates these headwinds.
Moskow covers the Consumer Defensive sector, focusing on stocks such as Mondelez International, Vital Farms, and McCormick & Company. According to TipRanks, Moskow has an average return of 2.1% and a 46.09% success rate on recommended stocks.
In another report released today, Deutsche Bank also maintained a Hold rating on the stock with a £19.60 price target.