Guinness supplies to pubs have been limited in the run-up to Christmas following a boom in sales and reported spate of panic buying. Brewer Diageo PLC (LSE:DGE) said the number of kegs UK hospitality venues could order was being “managed” after a spike in demand during the likes of recent international rugby fixtures.
After a tough 2024 things should start to look up for the alcoholic beverages sector in 2025, Deutsche Bank believes but not for Diageo PLC (LSE:DGE), which remains firmly on its sell list. The German bank called the problems facing the Guinness, Johnnie Walker and Smirnoff group well ahead of the pack earlier this year and it stays on the least preferred list heading into the New Year.
Diageo PLC (LSE:DGE) was among those hit in the wake of Donald Trump's latest pledge to introduce sweeping tariffs on goods from Mexico and Canada. Shares in the Guinness maker, which distils Don Julio tequila in Mexico and operates sites across the country, fell as much as 3.5% on Tuesday morning.
Diageo's lack of growth and declining revenues make it a risky investment despite its long history and presence in the staple industry. FY24 results show a 1% revenue decline and 12% drop in earnings per share, highlighting the company's problems. Diageo's market share is vulnerable due to increased competition from smaller brands and influencers, with no clear path for long-term growth.
Diageo needs its leading stout beer Guinness to keep growing fast and is pushing a zero alcohol alternative. But price hikes are turning off some UK customers and opening the door to rivals such as Heineken's Murphy's.
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.