Diageo (DEO) AI Stock Analysis

• Market Cap: $49.18B
• Dividend Yield: 4.8%
• Average Volume (3M): 1.51M
• Price to Earnings (P/E): 20.8
• Beta (1Y): 0.56
• Revenue Growth: 0.22%
• EPS Growth: -38.76%
• Country: US
• Employees: 30,092
• Sector: Consumer Defensive
• Sector Strength: 42
• Industry: Beverages - Wineries & Distilleries
• EPS (TTM): 2.64
• Shares Outstanding: 556,606,570
• 10 Day Avg. Volume: 1,367,491
• 30 Day Avg. Volume: 1,510,160
• PEG Ratio: -0.61
• Price to Book (P/B): 5.05
• Price to Sales (P/S): 2.77
• P/FCF Ratio: 20.86
• Enterprise Value/Market Cap: 1.59
• Enterprise Value/Revenue: 3.85
• Enterprise Value/Gross Profit: 6.40
• Enterprise Value/Ebitda: 15.87
• 1Y Price Target: $88.50
• Price Target Upside: -9.67% Downside
• Rating Consensus: Hold
• Number of Analyst Covering: 4
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 60 Neutral
• Price Target: $96.00 ▼(-2.01% Downside)

Diageo's overall stock score is primarily influenced by its financial performance and valuation. While the company shows strong revenue growth, challenges in profitability and leverage are significant concerns. The technical analysis indicates bearish momentum, which could impact short-term performance. The valuation is fair, with an attractive dividend yield, providing some support to the stock score.

Positive Factors

Revenue Growth

Strong revenue growth indicates robust sales performance and market demand, supporting long-term business expansion and competitiveness.

Brand Portfolio Strength

A strong brand portfolio enhances market positioning and pricing power, contributing to sustainable revenue and profit margins over time.

Board Strengthening

Strengthening the board with experienced directors can enhance strategic decision-making and governance, supporting sustainable growth.

Negative Factors

Profitability Challenges

Declining profitability can impact cash flow and investment capacity, posing challenges to sustaining growth and shareholder returns.

High Leverage

High leverage increases financial risk and may constrain financial flexibility, affecting the company's ability to invest in growth opportunities.

Declining Free Cash Flow

A decline in free cash flow can limit the company's ability to fund new investments and return capital to shareholders, impacting long-term growth.

Diageo Business Overview & Revenue Model

Company Description

Diageo plc, together with its subsidiaries, produces, markets, and sells alcoholic beverages. The company offers scotch, whisky, gin, vodka, rum, ready to drink products, raki, liqueur, wine, tequila, Canadian whisky, American whiskey, cachaca, and brandy, as well as beer, including cider and non-alcoholic products. It provides its products under the Johnnie Walker, Crown Royal, Bulleit and Buchanan's whiskies, Smirnoff, Cîroc and Ketel One vodkas, Casamigos, DeLeon and Don Julio tequilas, Captain Morgan, Baileys, Tanqueray, and Guinness brands. The company operates in North America, Europe, Turkey, Africa, Latin America, the Caribbean, the Asia Pacific, and internationally. The company was incorporated in 1886 and is headquartered in London, the United Kingdom.

How the Company Makes Money

Diageo generates revenue primarily through the sale of its alcoholic beverages, which include spirits and beer. The company's revenue model is built on a combination of direct sales to retailers and distributors, as well as through e-commerce channels. Key revenue streams include premium and super-premium spirits, which command higher price points and profit margins. Additionally, Diageo benefits from a strong brand portfolio, which allows it to leverage brand loyalty and pricing power. The company also engages in strategic partnerships and collaborations, enhancing its distribution capabilities and market reach. Factors contributing to its earnings include global market trends towards premiumization, increasing consumer demand for innovative products, and effective marketing strategies that bolster brand visibility and consumer engagement.

Diageo Financial Statement Overview

Summary

Diageo shows strong revenue growth but faces challenges in profitability and leverage. The decline in free cash flow is concerning, potentially affecting future investments. Overall, the company has growth potential but needs to address profitability and leverage to enhance financial stability.

Income Statement

Diageo has shown a strong revenue growth rate of 18.3% in the latest year, indicating robust sales performance. However, the net profit margin has decreased from 19.1% to 11.6%, suggesting a decline in profitability. The EBIT and EBITDA margins have also contracted, pointing to increased operational costs or pricing pressures.

Balance Sheet

The company maintains a high debt-to-equity ratio of 2.20, which indicates significant leverage and potential financial risk. Return on equity has decreased to 21.2%, reflecting reduced profitability relative to shareholder equity. The equity ratio remains stable, suggesting a balanced asset structure.

Cash Flow

Free cash flow has declined significantly by 51.8%, which could impact future investment capabilities. The operating cash flow to net income ratio is 0.40, indicating moderate cash generation relative to earnings. The free cash flow to net income ratio is 0.62, showing a reasonable conversion of profits into cash.

Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	20.33B	20.25B	20.27B	20.55B	15.45B	12.73B
Gross Profit	12.22B	12.17B	12.20B	12.27B	9.48B	7.70B
EBITDA	4.93B	6.36B	7.24B	8.06B	4.93B	4.28B
Net Income	2.36B	2.35B	3.87B	4.45B	3.94B	2.66B
Balance Sheet
Total Assets	49.32B	49.32B	45.47B	44.88B	36.52B	31.95B
Cash, Cash Equivalents and Short-Term Investments	2.65B	2.65B	1.13B	1.81B	2.54B	2.87B
Total Debt	24.40B	24.40B	21.50B	20.79B	16.02B	14.73B
Total Liabilities	36.14B	36.14B	33.40B	33.17B	27.00B	23.52B
Stockholders Equity	11.09B	11.09B	10.03B	9.86B	7.80B	6.90B
Cash Flow
Free Cash Flow	3.60B	2.69B	4.55B	4.33B	2.84B	3.03B
Operating Cash Flow	5.22B	4.30B	6.07B	5.74B	3.94B	3.65B
Investing Cash Flow	-1.74B	-1.72B	-1.59B	-1.43B	-1.34B	-1.09B
Financing Cash Flow	-1.50B	-1.49B	-3.11B	-3.04B	-3.26B	-2.79B

Diageo Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 97.97
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For DEO, the sentiment is Negative. The current price of 97.97 is above the 20-day moving average (MA) of 87.38, above the 50-day MA of 90.20, and below the 200-day MA of 99.69, indicating a bearish trend. The MACD of -0.97 indicates Negative momentum. The RSI at 39.96 is Neutral, neither overbought nor oversold. The STOCH value of 58.14 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for DEO.

Diageo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
ABEV	80 Outperform	$40.09B	13.94	15.97%	8.22%	-0.68%	4.29%
BUD	75 Outperform	$127.25B	17.70	8.97%	1.83%	-2.06%	21.03%
BF.B	74 Outperform	$12.12B	15.24	20.67%	3.42%	-4.59%	-19.19%
BF.A	70 Outperform	$12.12B	15.32	20.67%	3.41%	-4.59%	-19.19%
STZ	64 Neutral	$25.00B	20.97	15.91%	2.92%	-5.57%	119.49%
Sector *	62 Neutral	$20.33B	14.63	-3.31%	3.23%	1.93%	-12.26%
DEO	60 Neutral	$49.18B	20.79	22.33%	4.80%	0.22%	-38.76%

Diageo Corporate Events

Diageo Announces November 2025 Corporate Shareholding Updates

In November 2025, Diageo plc made several announcements regarding its corporate activities. On November 3, the company reported its total voting rights and capital, noting that as of October 31, 2025, it had 2,432,425,480 ordinary shares issued, with 206,023,016 held in treasury. This left 2,226,402,464 voting rights available for shareholders. On November 10, Sir John Manzoni, the Chair, purchased shares under a company arrangement, and on the same day, transactions related to the Diageo 2001 Share Incentive Plan were disclosed, involving Nik Jhangiani, Interim CEO, and Ewan Andrew, a member of the Executive Committee. These transactions reflect ongoing corporate governance and shareholding adjustments within Diageo.

The most recent analyst rating on (DEO) stock is a Hold with a $96.00 price target. To see the full list of analyst forecasts on Diageo stock, see the DEO Stock Forecast page.