London, Feb 27, 2026, 08:58 GMT — Regular session
- Diageo shares were little changed in early London trade, after a two-day selloff
- Citi cut its target price but kept a “buy” rating, citing tougher U.S. conditions
- Investors are waiting on details of CEO Dave Lewis’s turnaround plan and the April dividend timetable
Diageo shares edged down 0.1% to 1,584.5 pence by 0858 GMT, after Citi cut its target price to 2,200p from 2,425p on Thursday, while keeping a “buy” rating. 1
The stock has been trying to find its footing after a sharp slide on Wednesday, when the spirits maker halved its interim dividend and cut its annual sales outlook in new chief executive Dave Lewis’s first results presentation.
That matters because Diageo has long been treated as a defensive, income-heavy holding in London. A reset that hits both guidance and the payout can trigger forced selling, and it leaves investors looking for proof the new plan can work.
“There is no point trying to dress up the six-month figures. These are awful results, and the repair job is massive,” said Dan Coatsworth, head of markets at AJ Bell, after Diageo’s update. Peers including Pernod Ricard, Remy Cointreau and Campari also fell that day, as investors reassessed demand across the spirits sector. 2
Diageo said its interim dividend would be 20 cents a share, with the ex-dividend date set for April 16 for ordinary shareholders, and payment due on June 4. “The Board has taken the difficult decision to reduce the dividend to a more appropriate level which will accelerate the strengthening of our balance sheet,” Lewis said in the results statement. 3
The company also flagged weaker trading in North America and continued pressure in Chinese white spirits, while pointing to steps to free up cash and reduce leverage, including asset sales and cost savings. 4
Citi said the “challenging” U.S. marketplace drove further cuts to its estimates, and it lowered its FY26 earnings per share forecast. The bank warned near-term income-fund outflows “may be unhelpful,” even as it argued expectations have now been rebased. 5
Investors are now watching for signs that any selective price cuts or extra spending to defend share do not squeeze margins more than management expects, especially with U.S. consumers still trading down.
The risk is that the slowdown in the United States lasts longer than forecast, or that competitive discounting spreads, forcing Diageo into a tougher volume-versus-price trade-off while it tries to rein in debt.
The next markers are any further detail on Lewis’s strategy work this quarter and the April 16 ex-dividend date, which will be an early test of how the shareholder base reshapes after the payout reset.
