Diageo assumed with Underweight from Equal Weight at Morgan Stanley

Morgan Stanley analyst Sarah Simon downgraded Diageo to Underweight from Equal Weight with a price target of $155, down from $186, after assuming coverage of the name. The analyst has a “thematic preference” for the beer sub-sector in beverages over spirits, saying relative growth rates will converge and a commodity-led margin recovery will occur in in fiscal 2024, which primarily favors the brewers. The firm sees a favorable risk/reward in AB InBev and names the stock its top sector pick.