Diageo Share Discussion Threads

[pete160] 13/11/2023 22:42

Their capital markets event on Wednesday will be critical in DGE providing confidence that Friday's announcement was not the start of a wider issue with margins over volume, or, if it is, that they have a credible plan to address, manage and offset it.

[hope1815] 13/11/2023 22:18

Citi Evaluation of Diageo's re-rating due to the news seems reasonable but citing

“We prefer Pernod”, is Citi’s investment conclusion. Is it problematic if Diageo has been honest on the sales outlook for South America's operation it seems reasonable that Pernod would reflect its own projection.

Diageo has a buyback continuing and after the fall last Friday, there were large purchases of shares after 14.30pm. The sums involved after 14.30 pm were around 9 million shares compared to 5.5 million shares traded before 14.30pm.

Again this happened today after 14.30pm with more shares traded after 14.30 pm. Both times showed a positive outlook in the blue zone. This does not show in the present share price but will have to see in the coming days how these buys play out.

To me, someone is accumulating in the background.

[redartbmud] 13/11/2023 18:17

Apart from two rougues, the rest of the herd have a bottom line starting with 3.

There are ways of reducing costs in the face of falling sales. I am sure that there are reasonable expenditure reductions through efficiency and smarter targeted advertising campaigns.
The fallout arising from reducing sales may prove to be less severe than the dynamic duo are anticipating.

Time will tell.

red

[philanderer] 13/11/2023 16:31

Diageo hangover to continue for some time, say City banks




Spirits group Diago PLC might have more bad news to come for investors, according to two top City brokers.

Shares in the Johnnie Walker, Guinness and Smirnoff group tanked 15% on Friday as it warned of slowing growth in Latin America/Caribbean, a region that accounts for around 11% of sales.

But that might not be the end of it, according to Deutsche Bank, one of the few brokers to have had a 'sell' rating on Diageo ahead of the warning and that had cut its share price target just days before.

The bank cut it again today, to 2,550p from 2,750p, with sales estimates for other regions in 2024, notably Europe, North America and Asia-Pacific, all lowered.

"Company commentary implies an organic margin decline in both the first half and full year 2024 fiscal year," Deutsche Bank said, adding that it sees a buyback next year as off the table.

'Sell' remains its stance.

Citi, too, says that even though Diageo saw the biggest one-day share price fall in its history on Friday, it is "tough to see a catalyst for the shares".

“Overall, the valuation de-rating of spirits appears to be largely complete and Diageo’s [current] buyback should provide a floor for the stock.

“But with LatAm destocking issues possibly lingering" into the second half of 2024 and given threats to first-half US organic sales growth, "it is not yet certain these Diageo downgrades will be the last“.

“We prefer Pernod”, is Citi’s investment conclusion.

Diageo shares today were flat at 2,851p.


proactiveinvestors.co.uk

[salver2] 13/11/2023 11:39

Pointless forecasts - does anyone listen to brokers

[philanderer] 13/11/2023 10:49

Barclays cuts Diageo price target to 3,730 (4,440) pence - 'overweight'

JPMorgan cuts Diageo price target to 3,500 (4,000) pence - 'overweight'

Jefferies cuts Diageo price target to 3,000 (3,500) pence - 'hold'

RBC cuts Diageo price target to 2,700 (3,000) pence - 'underperform'

Citigroup cuts Diageo price target to 3,050 (3,600) pence - 'neutral'

Bernstein cuts Diageo price target to 3,465 (3,850) pence - 'outperform'

Deutsche Bank cuts Diageo price target to 2,550 (2,750) pence - 'sell'

Morgan Stanley cuts Diageo price target to 2,600 (3,000) pence - 'underweight'

SocGen cuts Diageo price target to 3,200 (3,900) pence - 'buy'

Stifel cuts Diageo price target to 3,600 (4,100) pence - 'buy'

[mcunliffe1] 13/11/2023 09:37

DIS appears to have between 5 and 7 employees. I believe 5 are directors. Wage billl is almost £500k in total. Sales dropped massively this year compared to last, losses widened even further as a consequence.

They've changed from a distributor model to a self-selling style. Lots of unsold stock taken back from the ex-distributors. Costs rising for ingredients etc.

Never heard of their brands and suspect that the rums and gins would simply compete with those offerings from DGE.

I just bet the directors would love a £10m buyout. Most of their shares are owned by about 5 entities (including Rothschild).

[scepticalinvestor] 12/11/2023 22:50

DIS is bargepole. Not worth even 1m GBP

[redartbmud] 12/11/2023 19:06

haggis

I bought in on Friday after the dip, which I do believe is overdone. They have been on my watchlist for a while.

I am not up with Dis, so I have one question.
How would their stable of products complement those brands owned by Dge?

Under Dge ownership they would benefit from a greater high profile advertising profile, but that is at significant ongoing cost, but not at the expense of competing with existing products.

red

[haggismchaggis] 12/11/2023 18:07

In their results in July, Diageo stated cash and cash equivalents of £1,439m. They started an 'up to' $1 billion share buyback, but with the issues they have, that is likely to end or reduce significantly, which means they still have a cash mountain.
.
With some markets falling back for them, one way to recover some the business would be to acquire more products to sell in the markets that are working well for them.
.
DIS (Distil PLC) is valued at a paltry £2.91m but has some great products that Diageo could make huge with it's advertising machine.
.
If Diageo offered, say £10m for DIS, I can't see many DIS shareholders saying no.
.
Not saying it's going to happen, but it would not surprise me if I looked at the news at 7am one day and saw it had.

[mcunliffe1] 11/11/2023 14:37

Maybe Debra Crew is trying the same trick as Tufan Erginbilgic - the CEO at Rolls Royce. He arrived, described RR as a 'Burning Platform', the shares dropped and since then he's seen a steady large rise in the share price He'll claim all the credit of course.

Maybe Debra will follow and claim all the credit because eventually, when the market considers the fall somewhat over-egged the share price will rise.

[hope1815] 11/11/2023 13:29

Blackhorse I bought in on Friday after the drop, The USA side seems to have bought in as well. Wait till Monday if a correction has occurred. With Currys, I would Hold till January and see what happens.

[blackhorse23] 11/11/2023 12:47

Money moving to CURY & APH . I think bad things coming for this company

[salver2] 10/11/2023 23:22

That shows your ignorance of the cigarette industry and new products

[salver2] 10/11/2023 19:10

It’s a good business but quite frankly still somewhat overpriced-if you compare it to British American Tobacco it has half the profit much less than half the divi and is valued at 40 percent more-Diageo could be 15 quid a share and still not be as good value-it fell extra heavily today as it is supposed to be defensive with earnings consistency-it still at 28 pounds has a high P/E ratio

[benny shares] 10/11/2023 17:55

I do hope it's not another SFOR

[jubberjim] 10/11/2023 17:30

I have got a friend in common with Diageo 'Carrolan'

He is an equally successful drunk

[igoe104] 10/11/2023 16:56

The world's first and best-selling cream liqueur, Baileys, launched in 1974. Drinks giant Diageo purchased it in 2007, and Baileys is now one of Ireland's most successful drinks.

[scepticalinvestor] 10/11/2023 16:48

Well finished close enough to 2900 anywayFinshed the day 2% up after dropping 68k into this bad boy.Back to 3000p very quickly imo

[edwardt] 10/11/2023 16:10

Reason why I am in this is tequila . I will need some of it post today's fall. I see that as a positive feedback loop

[edwardt] 10/11/2023 16:01

Nice story!

[lindowcross] 10/11/2023 15:45

I have topped up on DGE. A quick glance at the Diageo website informs me the company owns the Bailey's brand. I recall hitch-hiking in the 1970's and was picked up by a driver who told me he was one of the inventors of this sickly-sweet drink. He told me how it was created in a plastic cup in an office in Soho in the 1970's. Another of their inventions was an early "fridge deodoriser". I often wonder how much cash he made from Baileys and when it was sold on.