Diageo plc ADR Dossier - Source-backed chat

Diageo plc ADR

DGELondon Stock Exchange

SectorConsumer Staples

IndustryDistillers & Wineries

Beta (adjusted)0.69

Intrinsic Value $114.87median of 5 methods · middle span $87-$132based on filings through 31 Dec 2025

Market Price $84.42Price as of 1 Oct 2026

UndervaluedIntrinsic value is 36% above the market price

−50% · IV below pricenear fair value ±15%IV above price · +50%

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Market Cap $46.9B

Enterprise Value $64.9B

Shares Outstanding 555.9M diluted

Moat Rating Wide

Next Earnings Date25 Feb 2027

Next ex-dividend16 Oct 2026

All prices and values are periodic snapshots, not live quotes. Source dates are shown for reference.

Thesis

Street consensus, scenarios, merits, risks, and invalidation triggers

AI-assisted

Thesis Summary

Diageo enters fiscal 2027 as an execution-dependent turnaround. Fiscal 2026 organic net sales declined 2%, including an 8.4% decline in North America, while organic operating profit increased 2% and free cash flow reached $3.211 billion. Management is implementing a $1.2 billion two-year restructuring programme designed to produce approximately $1 billion of savings, support a North America recovery and deliver low-single-digit net-sales CAGR and mid-single-digit organic operating-profit CAGR through fiscal 2029. The portfolio, Guinness momentum and geographic diversification provide recovery potential, but weak US competitiveness, Chinese white-spirits pressure, restructuring risk and the reduction in the recommended annual dividend to $0.50 argue against a more constructive recommendation before operating progress is demonstrated.

This section is the 12-month view: analyst targets and the probability-weighted scenarios built from them. The intrinsic value at the top of this page answers a different question: what the business is worth today.

Street view · analyst 12-month targets7 analysts · as of 18 Aug 2026

Low · most bearish analyst$76.00

Mean target$106.43

High · most bullish analyst$136.00

Our research · scenarios, merits, risks, and invalidation triggersResearch as of 2 Sep 2026

Scenarios · 12-month scenario targetsAnchored at research date

Bear CaseDownside scenario

$76.0024%

North America remains near its fiscal 2026 decline rate, Chinese white-spirits weakness persists, and restructuring savings are absorbed by reinvestment, tariffs, adverse mix or execution disruption. Organic sales fail to return to sustained growth, operating-profit momentum weakens and leverage remains above the fiscal 2027 target range, delaying financial flexibility.

Base CaseCentral scenario

$106.4357%

Matches the consensus mean

The turnaround progresses gradually: growth outside North America and restructuring savings offset a measured US recovery and lingering Chinese white-spirits pressure. Diageo broadly delivers low-single-digit net-sales CAGR, mid-single-digit organic operating-profit CAGR and fiscal 2027 leverage within its 2.5-3.0-times target range.

Bull CaseUpside scenario

$136.0019%

The operating-framework redesign is delivered substantially on schedule, approximately $1 billion of savings funds stronger innovation and commercial execution without reducing underlying profit, Guinness sustains strong growth, and North America stabilises earlier than planned. Diageo then achieves or exceeds its fiscal 2027-2029 low-single-digit sales and mid-single-digit operating-profit growth framework while reducing leverage toward approximately 2 times by fiscal 2029.

Scenarios are anchored to street consensus at the research date, with our probabilities and rationale.

Key Investment Merits

Management has established a measurable fiscal 2027-2029 framework: low-single-digit net-sales CAGR, mid-single-digit organic operating-profit CAGR and EPS growth ahead of operating-profit growth.
The redesigned operating framework and supply-chain programme are expected to save approximately $1 billion, creating capacity to fund innovation and competitiveness while protecting underlying profitability.
Diageo retains a broad global portfolio, while Guinness offers a distinct growth engine and management expects the business outside North America to produce 3-5% net-sales growth.

Key Investment Risks

North America, Diageo's largest market, recorded an 8.4% organic net-sales decline in fiscal 2026 and requires a multi-year competitive turnaround.
Asia Pacific organic net sales declined 6.3%, with Chinese white-spirits weakness and government-policy consequences creating continuing uncertainty.
The $1.2 billion restructuring programme carries implementation and cash-flow risk, while the recommended annual dividend was reduced to $0.50 from $1.0348 in fiscal 2025.

All scenarios are estimates and subject to change. Past performance is not indicative of future results.

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Explore this dossier

ValuationIntrinsic value, the six-method breakdown, peer medians, and your assumptions sandbox.Financial SnapshotRevenue, profitability, returns, balance sheet, dividends, and the filing-level detail.Qualitative AnalysisBusiness overview, strategic initiatives, and mergers, acquisitions & partnerships.Outlook & Key DatesForward estimates, reporting calendar, and the monitoring framework.