Diageo is struggling in LatAm due to the downtrading of beer and emerging spirits. Global volumes are down, but pricing strategies are mitigating revenue hits. Despite concerns, Diageo offers an attractive valuation and a solid shareholders' return.
DEO has been committed to strengthening its portfolio of brands and countering challenges like a cautious consumer market and retailer inventory adjustments.
Diageo is currently facing both company-specific and industry headwinds. I explain what these are. The market is not very optimistic on the company's future. We assess valuation to explain why. Many people believe that Diageo is in terminal decline so we compare it to Altria´s case to understand what might happen.
Diageo stock price has underperformed the market in recent years and is down 30% over the last 3 years. A global leader in the beverage alcohol industry which is well positioned to take advantage of the expected upturn in the market. I believe that Diageo is undervalued and the current level of the stock price represents a great buying opportunity.
DEO benefits from its focus on improving productivity, coupled with its diversified footprint. It concludes the sale of its shareholding in Guinness Nigeria PLC to Tolaram.
The owner of liquor brands like Guinness, Crown Royal and Johnnie Walker saw its shares rise Thursday on optimism that a bleak consumer spending environment may be improving.
Global beer and spirits giant Diageo PLC (LSE:DGE) chalked up a surprising gain on the London Stock Exchange today, despite the Smirnoff, Johnnie Walker, Guinness and many other cornerstone booze brands owner delivering another cautious trading update. “The global environment remains challenging for both our industry and Diageo,” said chief executive Debra Crew.
Trading commentary ahead of AGM 2024 LONDON, UNITED KINGDOM / ACCESSWIRE / September 26, 2024 / Debra Crew, Chief Executive, commented: "Our expectations are unchanged from when we reported our fiscal 24 preliminary results on 30 July 2024. The global environment remains challenging for both our industry and Diageo.
Diageo PLC (LSE:DGE) has a sell rating slapped on it by UBS, adding its voice to a growing list of brokers expressing concern about the pricing trends in the US spirits sector. The Swiss bank sees weak pricing extending into 2025 with its concern that the industry is losing its pricing power as consumers become more price-sensitive.
Diageo (NYSE: DEO) has seen around a 20% fall in value since early January 2023 – declining from levels of $166 then to $133 now – vs. an increase of 51% for the S&P 500 over this period.
Diageo's stock has declined nearly 40% since 2021 due to rising interest rates, negative sentiment toward UK equities, and stalled growth. Despite a near-decade high dividend yield of 3.2%, Diageo's modest growth outlook and inflationary pressures dampen investor confidence. The company faces challenges like weak demand in key markets, rising costs, and a shift toward non-alcoholic alternatives, impacting sales and margins.
DEO faces hurdles from shifting consumer sentiment and high inventory in LAC, while a cautious consumer backdrop impacts its U.S. Spirits segment in North America.