LONDON, June 26, 2026, 15:03 BST
- Diageo traded at 1,570.5p/1,571.0p, rising 0.58%. The FTSE 100 slipped 0.99% at 14:28 BST.
- TD Securities upgraded Diageo to “buy” and bumped its London price target up to 1,750p. But its note left fiscal 2026 organic sales growth unchanged at minus 2.0%.
- The new bull argument is about valuation and cost cuts, not a clear rebound in U.S. demand. TD pointed to 10 months running of year-on-year U.S. share declines.
Diageo plc (LON:DGE) traded higher on Friday, moving up while the broader London market was weaker. The stock got a same-day broker upgrade, which said investors are being asked to step into a cheap drinks name even though U.S. spirits share is still dropping.
Johnnie Walker and Guinness maker traded at 1,570.5p on the offer and 1,571.0p on the bid, rising 9p, or 0.58%. Volume hit 1.1 million shares. Year-to-date, AJ Bell data shows a high at 2,142p and a low of 1,350p, so shares remain near the lower end.
FTSE 100 dropped 0.99% to 10,425.24 as of 14:28 BST, Fidelity data showed. Diageo was among the few defensive names in the green after a tough Thursday. AJ Bell data put Diageo’s total return at minus 1.14% yesterday, while the index gained 0.69%.
TD Securities lifted Diageo to “buy” from “hold” and took its price target up to 1,750p, a 100p bump, Investing.com reported. That target is just about 11% over Friday’s close—thin for a new buy rating. The call points out the disconnect between valuation and U.S. execution risk. Investing
TD sees “valuation dislocation” as a good time to get in, pointing to “CEO-led cost cuts” that could restart growth. The broker put a 14x forward 12-month EPS multiple on the stock, 5.1 turns under Diageo’s five-year average forward P/E of 19.1. Investing
TD says Diageo’s lost ground. The bank said the company’s NABCA market share dropped from a high of 18.8% to 17.7% for the six months through April, with Diageo posting year-on-year share declines for 10 months straight. Guidance for fiscal 2026 organic sales growth stays at minus 2.0%, matching consensus and holding to the high end of Diageo’s minus 2% to minus 3% forecast.
Spirits stocks stayed under pressure. The National Alcohol Beverage Control Association reported control-state spirits sales fell again in May, with nine-litre case volumes off 1.7% and dollar sales dropping 4.4%. Over the past year, rolling 12-month data show spirits volumes down 1.1% and dollar volume down 3.1%.
Diageo’s third-quarter report laid out the divide. Organic net sales were up 0.3% in the quarter to March 31, beating forecasts that called for a drop. North America fell by high single digits on an organic basis. Diageo said Europe, Latin America and Caribbean, and Africa each saw organic growth of at least high single digit.
CEO Dave Lewis is putting the focus on the U.S. for the company’s reset. “North America remains our biggest challenge,” he said in Diageo’s May trading statement, and added, “our offer needs to be more competitive.” Diageo
Reuters said last month Lewis called fixing North America his top challenge, starting moves like price cuts on tequila brands including Casamigos. “It’s early days for Dave, but he does seem to be grasping it,” Richard Scrope, manager at VT Tyndall Global Select, which owns Diageo shares, told Reuters. Reuters
Balance sheet moves hit this week too. Reuters said June 24 that Diageo’s East African Breweries unit pushed Kenya’s chief justice to fast-track court hearings over attempts to freeze its planned $2.3 billion sale of a 65% stake to Asahi Group Holdings (TYO:2502). Diageo said it’s still confident and will keep defending its position but said it respects the court.
Diageo says selling EABL, with the deal set to close in the second half of 2026, will lower leverage and give it more financial flexibility. It’s also keeping to its Accelerate programme target, aiming for about $300 million in savings by fiscal 2026.
Diageo is set to report preliminary full-year numbers and a strategy update on Aug. 6, covering the year ended June 30. Shares moved Friday as traders bet Lewis could speed up cost cuts before U.S. share drifts further.
