Diageo (DGE) AI Stock Analysis

• Market Cap: $43.41B
• Dividend Yield: 3.79%
• Average Volume (3M): 3.73M
• Price to Earnings (P/E): 15.4
• Beta (1Y): 0.65
• Revenue Growth: -3.88%
• EPS Growth: -11.33%
• Country: UK
• Employees: 30,092
• Sector: Consumer Defensive
• Sector Strength: 68
• Industry: Beverages - Wineries & Distilleries
• EPS (TTM): 0.72
• Shares Outstanding: 2,225,295,400
• 10 Day Avg. Volume: 3,793,925
• 30 Day Avg. Volume: 3,734,554
• PEG Ratio: -0.66
• Price to Book (P/B): 5.91
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 22.78
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: $2,472.25
• Price Target Upside: 27.90% Upside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 14

• Rating: 70 Outperform
• Price Target: 2,269.00p ▲(17.38%Upside)

Diageo's strong financial performance and promising corporate events drive a positive outlook, despite mixed technical analysis and earnings call challenges. The company's focus on strategic growth initiatives and insider confidence provide a solid foundation for future performance.

Positive Factors

Brand Performance

Diageo has turned Guinness into a 'hot' brand, appealing across genders and age groups, accelerating its growth through strategic marketing and product innovation.

Cost Management

The Accelerate Program aims to deliver at least ~$3B in free cash flow annually from FY26 onwards, which is a significant boost for the company's financial health.

Sales Performance

Strong Q3 performance with organic sales increase, outperforming expectations.

Negative Factors

Guidance Withdrawal

Diageo withdrew its medium-term guidance for +5-7% organic net sales growth due to macro and geopolitical uncertainty.

Industry Challenges

There is a belief that the spirits industry underestimates structural factors like moderation trends and cannabis use, which could impact future growth.

Market Uncertainty

The timeline for U.S. spirits recovery remains uncertain due to consumer uncertainty and macro factors such as inflation and higher borrowing costs.

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 makes money primarily through the sale of its alcoholic beverages, which include spirits, beer, and wine. The company's revenue model is centered around its extensive portfolio of premium brands, which it markets and distributes globally. Key revenue streams include sales to wholesalers, retailers, and directly to consumers in various regions, with a significant presence in North America, Europe, and Asia. Diageo leverages its strong brand recognition and marketing strategies to drive consumer demand, while strategic partnerships and acquisitions help expand its market reach and product offerings. The company's earnings are also influenced by factors such as pricing strategies, product innovation, and efficiency in production and distribution processes.

Diageo Financial Statement Overview

Summary

Diageo exhibits strong profitability with a stable gross profit margin and consistent revenue growth, despite a recent slight dip. The balance sheet indicates manageable leverage and robust return on equity. Cash flow is strong, with positive free cash flow growth, although it has slowed recently.

Income Statement

Diageo demonstrates strong profitability with a stable gross profit margin and net profit margin. Revenue has shown consistent growth over the years, although there was a slight dip in the most recent TTM period. EBIT and EBITDA margins are healthy, reflecting good operational efficiency.

Balance Sheet

The balance sheet reveals a moderate debt-to-equity ratio, indicating manageable leverage. The equity ratio is stable, while return on equity is robust, underscoring effective use of equity to generate profit.

Cash Flow

Diageo's cash flow is strong, with healthy operating cash flow relative to net income. The free cash flow growth is positive, although it has slowed recently. The company maintains an efficient conversion of net income to cash.

Breakdown
TTM	Jun 2024	Jun 2023	Jun 2022	Jun 2021	Jun 2020
Income Statement		Total Revenue
15.80B	16.10B	17.11B	15.45B	12.73B	11.75B
	Gross Profit
9.52B	9.77B	10.21B	9.48B	7.70B	7.10B
	EBIT
4.51B	6.00B	4.63B	4.41B	3.73B	2.14B
	EBITDA
4.83B	5.41B	5.63B	4.93B	4.20B	4.48B
	Net Income Common Stockholders
2.81B	3.87B	4.45B	3.94B	2.66B	1.73B
Balance Sheet		Cash, Cash Equivalents and Short-Term Investments
1.32B	1.49B	1.79B	2.54B	2.87B	3.40B
	Total Assets
37.50B	35.97B	35.62B	36.52B	31.95B	33.31B
	Total Debt
18.05B	18.62B	16.50B	16.02B	14.73B	16.79B
	Net Debt
16.72B	17.49B	15.06B	13.73B	11.98B	13.46B
	Total Liabilities
27.59B	26.43B	26.33B	27.00B	23.52B	24.87B
	Stockholders Equity
8.21B	7.94B	7.82B	7.80B	6.90B	6.77B
Cash Flow		Free Cash Flow
2.13B	2.06B	1.84B	2.84B	3.03B	1.62B
	Operating Cash Flow
3.35B	3.26B	3.02B	3.94B	3.65B	2.32B
	Investing Cash Flow
-1.18B	-1.44B	-1.20B	-1.34B	-1.09B	-805.00M
	Financing Cash Flow
-2.37B	-2.46B	-2.41B	-3.26B	-2.79B	1.04B

Diageo Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 1933.00
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Positive
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For GB:DGE, the sentiment is Negative. The current price of 1933 is below the 20-day moving average (MA) of 2068.20, below the 50-day MA of 2067.10, and below the 200-day MA of 2291.10, indicating a bearish trend. The MACD of -36.63 indicates Positive momentum. The RSI at 32.45 is Neutral, neither overbought nor oversold. The STOCH value of 14.84 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for GB:DGE.

Diageo Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
CWK	78 Outperform	£2.89B	21.38	14.14%	1.72%	8.74%	-8.69%
BAG	76 Outperform	£778.74M	19.24	13.01%	2.45%	5.10%	3.23%
CCH	76 Outperform	£14.19B	20.47	26.05%	2.22%	2.77%	26.43%
TATE	76 Outperform	£2.42B	38.81	3.39%	3.51%	-11.03%	-2.05%
DGE	70 Outperform	$43.41B	15.44	35.82%	3.79%	-3.88%	-11.33%
Sector *	65 Neutral	$8.88B	14.98	4.76%	203.76%	3.54%	-2.49%
BATS	63 Neutral	£76.59B	25.59	5.92%	6.73%	-5.19%	―

Diageo Corporate Events

Diageo Reports Strong Q3 Sales Growth and Launches Accelerate Programme

Diageo reported a 2.9% increase in net sales for Q3 of fiscal 2025, driven by a 5.9% growth in organic net sales, despite challenges from foreign exchange and disposals. The company is launching the first phase of its Accelerate programme, aiming to enhance operational agility and efficiency, with a focus on cost savings and cash flow improvement. This initiative is expected to deliver significant free cash flow and support Diageo’s long-term growth strategy, while addressing the impact of tariffs and maintaining stakeholder value.

The most recent analyst rating on (GB:DGE) stock is a Buy with a £3450.00 price target. To see the full list of analyst forecasts on Diageo stock, see the GB:DGE Stock Forecast page.

Diageo Chair Receives Shares Through Dividend Reinvestment

Diageo plc announced that Sir John Manzoni, the company’s Chair, received ordinary shares through a Dividend Reinvestment Plan related to the interim dividend paid on April 24, 2025. This transaction, disclosed in compliance with the UK Market Abuse Regulation, highlights the ongoing engagement of key company figures in Diageo’s financial activities, potentially reinforcing shareholder confidence and market stability.

The most recent analyst rating on (GB:DGE) stock is a Buy with a £3450.00 price target. To see the full list of analyst forecasts on Diageo stock, see the GB:DGE Stock Forecast page.

Diageo Executives Participate in Share Incentive Plan

Diageo plc announced transactions under its 2001 Share Incentive Plan, involving the purchase of partnership shares and the awarding of matching shares to key executives. This move, disclosed in compliance with UK Market Abuse Regulation, underscores Diageo’s commitment to aligning management interests with shareholder value, potentially impacting executive motivation and company performance.

The most recent analyst rating on (GB:DGE) stock is a Buy with a £3450.00 price target. To see the full list of analyst forecasts on Diageo stock, see the GB:DGE Stock Forecast page.

Diageo Announces Director’s Share Acquisition via Dividend Reinvestment

Diageo plc announced that Valerie Chapolaud-Floquet, a Non-Executive Director, received ordinary shares through a Dividend Reinvestment Plan following the interim dividend paid on April 24, 2025. This transaction, disclosed in compliance with the UK Market Abuse Regulation, highlights Diageo’s ongoing commitment to shareholder engagement and transparency in its financial operations.

The most recent analyst rating on (GB:DGE) stock is a Buy with a £3450.00 price target. To see the full list of analyst forecasts on Diageo stock, see the GB:DGE Stock Forecast page.

Diageo Chair Purchases Shares, Indicating Confidence in Market Position

On May 12, 2025, Sir John Manzoni, Chair of Diageo plc, purchased ordinary shares of the company as part of an arrangement with the company. This transaction, conducted on the London Stock Exchange, reflects ongoing managerial investment in Diageo, potentially signaling confidence in the company’s market position and future prospects.

The most recent analyst rating on (GB:DGE) stock is a Buy with a £3450.00 price target. To see the full list of analyst forecasts on Diageo stock, see the GB:DGE Stock Forecast page.

Diageo Executive Committee Members Receive Shares via Dividend Reinvestment

Diageo plc announced that members of its Executive Committee, including Hina Nagarajan, Dan Mobley, and Cristina Diezhandino, received ordinary shares through a Dividend Reinvestment Plan following the interim dividend paid on April 24, 2025. This transaction, conducted on the London Stock Exchange, reflects the company’s ongoing commitment to rewarding its management team and aligning their interests with shareholder value.

Diageo Commits to Quarterly Financial Updates Amid Declining Sales

Diageo has announced its commitment to providing more frequent updates on its financial performance, including quarterly trading statements. The company reported a decline in net sales and volume for the third quarter of fiscal 2024, with net sales down by 2.5% and volume down by 3.6% year-over-year. These updates aim to enhance transparency and provide stakeholders with timely insights into the company’s performance, which is crucial given the current market dynamics.

Diageo Announces Executive Share Transactions Under Incentive Plan

Diageo plc announced transactions under its 2001 Share Incentive Plan, where partnership shares were purchased and matching shares awarded to key executives, including the Chief Financial Officer and members of the Executive Committee. This move, disclosed in compliance with the UK Market Abuse Regulation, highlights Diageo’s ongoing commitment to incentivize its leadership team, potentially impacting its market positioning by aligning executive interests with shareholder value.

Diageo Launches $1.5 Billion Bond Offering

Diageo has announced the launch and pricing of a $1.5 billion bond offering, consisting of two tranches of fixed rate notes due in 2030 and 2035. The proceeds from this issuance will be used for general corporate purposes, and the bond offering is scheduled to settle on April 15, 2025. This strategic financial move is expected to support Diageo’s ongoing operations and strengthen its market position.

Diageo Chair Purchases Shares in Compliance with Market Regulations

Diageo plc announced that Sir John Manzoni, the Chair, has purchased 315 ordinary shares at a price of £20.79 per share under an arrangement with the company. This transaction, conducted on April 10, 2025, on the London Stock Exchange, aligns with the UK Market Abuse Regulation, reflecting the company’s commitment to transparency in managerial dealings.

Diageo Announces Sterling Equivalent of Interim Dividend

Diageo has announced the Sterling equivalent of its interim dividend, set at 31.48 pence per ordinary share, based on a conversion rate of US$1=£0.77728. This announcement follows the earlier declaration of a 40.50 US cents interim dividend per share, with the payment scheduled for 24 April 2025. The exchange rate was determined through forward contracts, reflecting Diageo’s strategic financial management.

Diageo Executive Purchases Company Shares

Diageo plc announced a transaction involving the purchase of its ordinary shares by Daniel Mobley, a member of the Executive Committee. This transaction, conducted on the London Stock Exchange, reflects managerial confidence in the company’s performance and may influence investor perceptions positively.

Diageo Grants Incentive Awards to Diageo India CEO-Designate

Diageo has announced the grant of options and conditional awards to Praveen Someshwar, CEO-Designate of Diageo India, under its 2023 Long Term Incentive Plan. These awards, which are subject to performance conditions, aim to align management incentives with shareholder interests and enhance Diageo’s strategic positioning in the Indian market.

Diageo Executive’s Share Transactions Highlight Regulatory Compliance

Diageo announced a transaction involving Hina Nagarajan, a member of its Executive Committee, who released ordinary shares under the company’s Long Term Incentive Plan and sold shares to cover tax liabilities. This transaction, conducted in compliance with UK Market Abuse Regulation, highlights the company’s ongoing commitment to transparency and regulatory adherence, potentially impacting stakeholder perceptions and market positioning.

Diageo Announces Share Transactions Under Incentive Plan

Diageo announced transactions involving its 2001 Share Incentive Plan, where partnership shares were purchased and matching shares awarded. This move, involving key executives, aligns with regulatory requirements and reflects Diageo’s commitment to employee investment, potentially impacting stakeholder confidence and market perception.