Want to see DEO full AI Analyst Report?
Top Page
Diageo
(NYSE:DEO)
Select Model
Select Model
Rating:64Neutral
Price Target:
$100.00
â–²(5.54% Upside)
Action:Reiterated
Date:10/21/26
DEO scores mid-range primarily due to weakening recent profitability and high leverage despite strong cash generation. Technicals are supportive with price above key moving averages and positive MACD, but momentum looks somewhat stretched. Valuation is a headwind (P/E ~30) and the earnings call was mixed—cost-savings and deleveraging plans help, but organic sales declines and large impairment/restructuring charges temper the outlook.
Positive Factors
High Gross Margins
Persistently high gross margins indicate meaningful brand equity and premiumization potential within Diageo’s portfolio. This provides a durable buffer against input-cost pressure and supports continued marketing investment, pricing actions, and operating resilience over the next several quarters.
Negative Factors
Regional Sales Weakness
Broad sales declines, particularly in North America and Asia Pacific, indicate that Diageo is facing more than an isolated market issue. Persistent weakness in major regions can reduce operating leverage, pressure brand investment returns, and make a near-term revenue recovery more dependent on execution.
Read all positive and negative factors
Positive Factors
Negative Factors
High Gross Margins
Persistently high gross margins indicate meaningful brand equity and premiumization potential within Diageo’s portfolio. This provides a durable buffer against input-cost pressure and supports continued marketing investment, pricing actions, and operating resilience over the next several quarters.
Read all positive factors
Diageo Key Performance Indicators (KPIs)
Any
Net Sales by Geography
Shows sales distribution across various regions, indicating market strength and potential growth areas, essential for understanding Diageo's global market presence.
Shows sales distribution across various regions, indicating market strength and potential growth areas, essential for understanding Diageo's global market presence.
Data provided by:
The Fly
The FlyDiageo (DEO) vs. SPDR S&P 500 ETF (SPY)
Market Cap
$53.30B
Dividend Yield2.08%
Average Volume (3M)1.04M
Price to Earnings (P/E)30.7
Beta (1Y)0.58
Revenue Growth-3.59%
EPS Growth-26.73%
CountryUS
Employees27,972
SectorConsumer Defensive
Sector Strength42
IndustryBeverages - Alcoholic
Share Statistics
EPS (TTM)3.12
Shares Outstanding556,895,100
10 Day Avg. Volume1,189,872
30 Day Avg. Volume1,037,491
Financial Highlights & Ratios
PEG Ratio-0.98
Price to Book (P/B)4.11
Price to Sales (P/S)2.28
P/FCF Ratio14.02
Enterprise Value/Market Cap1.26
Enterprise Value/Revenue3.42
Enterprise Value/Gross Profit5.75
Enterprise Value/Ebitda10.52
Forecast
1Y Price Target
$109.33Price Target Upside15.39% Upside
Rating ConsensusStrong Buy
Number of Analyst Covering3
EPS Forecast (FY)6.66
Revenue Forecast (FY)$19.11B
Diageo Business Overview & Revenue Model
Company Description
Diageo plc, operating through its various subsidiaries, stands as a major global player in the production, marketing, and distribution of alcoholic beverages. The company boasts an extensive product range, featuring a wide selection of spirits suc...
How the Company Makes Money
Diageo primarily makes money by selling alcoholic beverage products to distributors, wholesalers, retailers, and on-trade operators, recognizing revenue from the transfer of control of goods under customer contracts. Its core revenue stream is the...
Diageo Earnings Call Summary
Earnings Call Date:Aug 06, 2026
(Q4-2026)
| % Change Since: |
Next Earnings Date:Jan 28, 2027
Earnings Call Sentiment Neutral
The call was mixed: Diageo reported strong free cash flow, reduced leverage, operating profit growth, meaningful cost savings, and solid performance in Europe, India, Latin America, and Africa. However, these positives were balanced by declines in organic sales, North America, Asia Pacific, volumes, price mix, and gross profit, along with substantial impairment and restructuring charges.Positive Updates
Operating Profit and EPS Growth
Organic operating profit increased 2%, while EPS pre-exceptionals increased 0.7% year over year to $1.653, supported by organic operating profit growth and favorable foreign exchange.
Negative Updates
Organic and Reported Sales Decline
In a continued challenging macro environment and industry backdrop, organic net sales declined 2%. Reported net sales declined 3%, driven by the organic sales decline and the adverse impact of acquisitions and disposals, which were only partly mitigated by favorable foreign exchange and hyperinflation adjustments.
Read all updates
Q4-2026 Updates
Positive
Negative
Operating Profit and EPS Growth
Organic operating profit increased 2%, while EPS pre-exceptionals increased 0.7% year over year to $1.653, supported by organic operating profit growth and favorable foreign exchange.
Read all positive updates
Company Guidance
Nik said guidance would be provided later that day at the Capital Markets Day; the sale of Diageo’s 65% shareholding in EABL is expected to de-lever the balance sheet by circa 0.25x and to complete in the second half of calendar 2026, while the sale of USL’s ownership in Royal Challengers Bengaluru should also result in around a 0.1x reduction in net debt-to-EBITDA. Dave said the restructuring plan over two years is a $1.2 billion restructuring plan, including $1.1 billion for operating framework changes and $100 million or so for supply chain, with savings around $1 billion, comprising $850 million from the operating framework and $150 million from the supply chain; these savings will allow Diageo to invest in innovation selectively without needing to reduce the operating profit.Diageo Financial Statement Overview
Summary
Income Statement
67
Positive
Balance Sheet
56
Neutral
Cash Flow
70
Positive
| Breakdown | Jun 2026 | Jun 2025 | Jun 2024 | Jun 2023 | Jun 2022 |
|---|---|---|---|---|---|
Income Statement | |||||
| Total Revenue | 19.60B | 20.25B | 20.27B | 16.23B | 16.96B |
| Gross Profit | 11.66B | 12.17B | 12.20B | 9.68B | 9.48B |
| EBITDA | 6.30B | 6.36B | 7.24B | 6.40B | 6.07B |
| Net Income | 1.73B | 2.35B | 3.87B | 3.51B | 3.54B |
Balance Sheet | |||||
| Total Assets | 46.84B | 49.32B | 45.47B | 35.43B | 36.52B |
| Cash, Cash Equivalents and Short-Term Investments | 2.02B | 2.65B | 1.13B | 1.43B | 2.54B |
| Total Debt | 22.20B | 24.40B | 21.50B | 16.41B | 16.02B |
| Total Liabilities | 33.89B | 36.14B | 33.40B | 26.19B | 27.00B |
| Stockholders Equity | 10.87B | 11.09B | 10.03B | 7.78B | 7.80B |
Cash Flow | |||||
| Free Cash Flow | 3.19B | 2.69B | 4.55B | 3.42B | 2.84B |
| Operating Cash Flow | 4.38B | 4.30B | 6.07B | 4.53B | 3.94B |
| Investing Cash Flow | -980.03M | -1.72B | -1.59B | -1.13B | -1.34B |
| Financing Cash Flow | -3.78B | -1.49B | -3.11B | -2.40B | -3.57B |
Diageo Technical Analysis
Positive
94.75
Price Trends
88.70
Positive
85.96
Positive
84.39
Positive
Market Momentum
2.37
Negative
68.99
Neutral
85.23
Negative
Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DEO, the sentiment is Positive. The current price of 94.75 is above the 20-day moving average (MA) of 88.56, above the 50-day MA of 88.70, and above the 200-day MA of 84.39, indicating a bullish trend. The MACD of 2.37 indicates Negative momentum. The RSI at 68.99 is Neutral, neither overbought nor oversold. The STOCH value of 85.23 is Negative, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive sentiment for DEO.
Diageo Risk Analysis
Diageo disclosed 21 risk factors in its most recent earnings report. Diageo reported the most risks in the "Legal & Regulatory" category.
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy
Latest Risks Added 0 New Risks
Diageo Peers Comparison
UnderperformOutperform
Sector (62)
Name | Overall Rating | Market Cap | P/E Ratio | ROE | Dividend Yield | Revenue Growth | EPS Growth |
|---|---|---|---|---|---|---|---|
81 Outperform | $52.00B | 16.04 | 18.13% | 3.66% | 4.24% | 19.95% | |
72 Outperform | $167.57B | 14.20 | 12.72% | 1.60% | 6.60% | 31.61% | |
69 Neutral | $23.47B | 12.43 | 23.58% | 2.96% | -4.31% | 62.57% | |
67 Neutral | $13.62B | 19.10 | 17.80% | 3.07% | -0.18% | -13.00% | |
64 Neutral | $53.30B | 30.69 | 15.52% | 2.08% | -3.59% | -26.73% | |
62 Neutral | $20.33B | 14.63 | -3.31% | 3.23% | 1.93% | -12.26% | |
57 Neutral | $7.71B | -3.57 | -22.65% | 4.63% | -1.77% | -326.16% |
* Consumer Defensive Sector Average
DEO
Diageo
95.97
2.80
3.00%
BUD
Anheuser-Busch Inbev Sa
84.26
23.43
38.51%
BF.A
Brown Forman A
30.13
2.91
10.71%
STZ
Constellation Brands
138.68
4.64
3.46%
TAP
Molson Coors
41.21
-2.11
-4.86%
ABEV
Ambev SA
3.30
1.19
56.40%
Diageo Corporate Events
Diageo Updates Voting Rights and Reports Executive Share Transactions for July 2026
Aug 3, 2026
Diageo reported that as of 30 June 2026 its issued share capital comprised 2,432,397,125 ordinary shares, of which 205,812,357 were held in treasury, leaving 2,226,584,768 voting rights available to shareholders under UK disclosure regulations. Th...
Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
Disclaimer
This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.