Analyst Andrea Pistacchi from Bank of America Securities maintained a Buy rating on Diageo and keeping the price target at p2,120.00.
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Andrea Pistacchi has given his Buy rating due to a combination of factors including Diageo’s better-than-expected Q1 performance, despite challenges in key markets like China and the US. The company’s Q1 sales were flat, outperforming the consensus expectation of a decline, with notable growth in regions such as Europe, Latin America, and Africa. This solid performance is attributed to strong sales in spirits and Guinness, offsetting weaker results in North America and Asia-Pacific.
Despite revising down guidance due to a challenging environment, particularly in China and the US, Diageo is still expected to achieve positive profit growth and progress in reducing leverage. The company’s valuation is currently at a significant discount compared to European staples, making it an attractive investment opportunity. Pistacchi’s analysis suggests that while there are cautious expectations for recovery in the US spirits market, Diageo’s overall financial health and strategic positioning support the Buy recommendation.
In another report released yesterday, Citi also maintained a Buy rating on the stock with a £24.80 price target.