Analyst Andrea Pistacchi from Bank of America Securities reiterated a Buy rating on Diageo and increased the price target to p2,120.00 from p2,050.00.
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Andrea Pistacchi has given his Buy rating due to a combination of factors influencing Diageo’s current and future performance. Despite a slight anticipated decline in Q1 organic sales, which aligns with the company’s guidance, the overall outlook remains positive. The management is expected to reaffirm its full-year guidance, projecting a slight increase in sales and mid-single-digit organic operating profit growth, particularly in the second half of the year.
Andrea Pistacchi also highlights the valuation aspect, noting that Diageo is trading at a significant discount compared to European staples, which presents a potential upside. Additionally, the company’s strategic execution and innovation are expected to drive improvements in the US market. Diageo’s commitment to achieving mid-single-digit organic EBIT growth by FY26, along with its deleveraging efforts, further supports the Buy rating. Potential asset disposals could serve as positive catalysts, enhancing the company’s financial position and growth prospects.
In another report released today, Citi also maintained a Buy rating on the stock with a £24.80 price target.
Based on the recent corporate insider activity of 138 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of DGEAF in relation to earlier this year.