London, July 6, 2026, 19:04 BST
- Diageo plc LON:DGE ended 1.43% lower at 1,512p on Monday, lagging the FTSE 100 (INDEXFTSE:UKX), which lost 0.26%.
- The stock lost 20.78% in the last year and traded at about 50% of its three-month average volume Monday.
- Analysts expect a bounce, with the 12-month median target from 20 analysts at 1,913.49p. Still, Diageo’s internal consensus is pointing to a 2.1% drop in organic sales for fiscal 2026.
Diageo plc LON:DGE dropped over five times as much as the FTSE 100 on Monday. The Johnnie Walker and Guinness maker closed at £15.12, off 29.41% from its 52-week peak of £21.42. The stock is trading near the bottom of its recent range, still looking cheap but not yet mended.
Volume and guidance stand out. Monday’s drop saw just 2.88 million shares traded, much lighter than the three-month norm at 5.92 million. The market was closed, and shares moved in a 1,503p-1,553p band, according to .
| Monday market read | Diageo |
|---|---|
| Last price | 1,512p |
| Daily move | down 1.43% |
| Day range | traded between 1,503p and 1,553p |
| Volume | 2.88 mln |
| 3-month average volume | 5.92 mln |
| 1-year change | fell 20.78% over the past year |
| 52-week range | low of 1,351p, high of 2,142p |
| Market value | £33.54 bln |
Market forecasts suggest there’s still interest in the stock. LSEG numbers from Investors Chronicle put ratings at seven “buy”, nine “outperform”, five “hold” and two “sell” as of July 2. The group’s 12-month median target price was 1,913.49p, about 24.74% higher than the price used for those forecasts, and roughly 27% above where shares closed Monday. Investors Chronicle
| 12-month price target | Pence | Versus 1,534p base used by IC/LSEG |
|---|---|---|
| Lowest | 1,295.63 | -15.5% |
| Middle | 1,913.49 | +24.7% |
| Highest | 2,583.77 | +68.4% |
The catch: Diageo’s own sell-side consensus isn’t calling for a quick rebound in sales. As of June 1, the consensus from 18 analysts puts fiscal 2026 organic net sales down 2.1%, then forecasts 1.7% growth in 2027 and 3.5% for 2028.
| Diageo consensus | F26 | F27 | F28 | F29 |
|---|---|---|---|---|
| Organic net sales growth | -2.1% | 1.7% | 3.5% | 4.1% |
| Reported net sales | $19.64 bln | $19.43 bln | $19.94 bln | $20.82 bln |
| Organic operating profit growth | 0.1% | 1.1% | 4.9% | 5.1% |
| EPS before exceptionals | 160.0 cents | 162.4 cents | 173.4 cents | 186.9 cents |
| Free cash flow | $2.97 bln | $3.26 bln | $3.38 bln | $3.50 bln |
This is something investors are watching, since the median target price bakes in rerating with not much change yet in the earnings base. Street forecasts have reported net sales rising by about 1.5% from fiscal 2026 to fiscal 2028. EPS before exceptionals, though, is seen up about 8.4%. The bigger earnings jump is held for fiscal 2029.
North America drags on the outlook. Diageo’s consensus has organic net sales in North America falling 8.0% for fiscal 2026 and dropping another 2.2% in fiscal 2027, then turning positive with 1.7% growth in fiscal 2028. The forecast calls for growth to keep going in Europe, Latin America and Africa.
| Organic net sales growth by region | F26 | F27 | F28 |
|---|---|---|---|
| North America | -8.0% | -2.2% | +1.7% |
| Europe and Turkey | +3.2% | +2.4% | +2.7% |
| Asia Pacific | -6.8% | +4.4% | +5.9% |
| Latin America & Caribbean | +6.2% | +5.9% | +6.1% |
| Africa | +9.9% | +7.1% | +6.6% |
Diageo reported third-quarter net sales up 2.3% to $4.5 billion, with organic net sales inching up just 0.3%. North America organic net sales dropped by a high single-digit percentage. CEO Sir Dave Lewis said, “North America remains our biggest challenge” and pointed to ongoing actions. Lewis added that a strategy update will come with the full-year results on Aug. 6. Diageo
The company held its fiscal 2026 targets. It still sees organic net sales falling 2% to 3%, organic operating profit flat to a low single-digit gain, and free cash flow at $3 billion. The Accelerate programme remains on track for around $300 million of savings by end of fiscal 2026.
U.S. market data helps explain the heavy focus on North America. IWSR said total beverage alcohol consumption in the U.S. dropped 5% by volume in 2025, with spirits down 4%. Spirits-based RTDs added 14%, but malt-based RTDs slipped 5%. IWSR President and Managing Director Marten Lodewijks said the number of drinkers hasn’t shifted; “more people are drinking less often.” IWSR
Recent analyst notes pointed to both low valuation and demand worries. TD Cowen’s Seamus Cassidy said the market was “overstating alcohol’s structural bear case” and called the weakness mostly cyclical. The firm kept a buy on Diageo’s U.S. ADR, adding that cost cuts under Dave Lewis could free up money to reinvest. Investing
TD Securities raised its rating on Diageo to “buy” from “hold” on June 26, bumping its London-listed price target to 1,750p from 1,650p. The firm pointed to what it called “valuation dislocation,” and said its new target uses a 14x forward earnings multiple, lower than the five-year average of 19.1x for Diageo. Investing
Diageo and Pernod Ricard (EPA:RI) are among liquor stocks trading at what The Wall Street Journal called “tobacco-like valuations” on Sunday, citing lower alcohol consumption and health worries hitting distillers. The Wall Street Journal
Balance sheet repair is part of the bull pitch. At the half year, Diageo’s net debt was $21.7 billion. The company expects $2.3 billion in net proceeds from selling its stake in East African Breweries to Asahi Group Holdings (TYO:2502), a move Diageo says should cut net debt to adjusted EBITDA by about 0.25 times.
