| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 30.70 | -23 |
| Intrinsic value (DCF) | 16.00 | -60 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 29.90 | -25 |
Diageo plc (DGE.PA) is a global leader in premium alcoholic beverages, headquartered in London, United Kingdom. With a rich heritage dating back to 1886, Diageo boasts an extensive portfolio of iconic brands, including Johnnie Walker, Smirnoff, Guinness, and Don Julio. The company operates across key markets in North America, Europe, Africa, Latin America, and Asia Pacific, catering to diverse consumer preferences. Diageo's business model focuses on premiumization, innovation, and sustainability, positioning it as a dominant player in the Beverages - Wineries & Distilleries sector. Its diversified product range—spanning whisky, vodka, tequila, rum, and beer—ensures resilience against regional market fluctuations. As a Consumer Defensive stock, Diageo benefits from stable demand, strong brand loyalty, and strategic acquisitions like Casamigos, reinforcing its growth trajectory. With a market cap exceeding €91 billion, Diageo is a cornerstone of the global spirits industry, appealing to investors seeking long-term stability and exposure to emerging markets.
Diageo presents a compelling investment case due to its strong brand equity, global diversification, and consistent cash flow generation. The company's premiumization strategy and exposure to high-growth markets (e.g., tequila in the U.S., Scotch in Asia) support revenue resilience. However, risks include exposure to macroeconomic headwinds (e.g., inflation impacting input costs), regulatory pressures in key markets, and debt levels (€18.6 billion). With a beta of 0.36, Diageo is relatively defensive, but its valuation multiples and dividend yield (currently ~2.4%) warrant scrutiny amid rising interest rates. Long-term growth hinges on emerging market penetration and innovation in ready-to-drink categories.
Diageo's competitive advantage lies in its unparalleled brand portfolio, scale, and distribution network. Its dominance in Scotch whisky (Johnnie Walker) and vodka (Smirnoff) is complemented by strategic acquisitions in high-growth categories like tequila (Don Julio, Casamigos). The company outperforms peers in premiumization, with over 50% of sales from premium brands. Diageo's global footprint—particularly in Africa and Latin America—provides a hedge against regional downturns. However, it faces intensifying competition in the U.S. spirits market, where Brown-Forman and Pernod Ricard are aggressively expanding. Diageo’s R&D focus on low-alcohol and non-alcoholic products aligns with health trends, but its reliance on mature markets (e.g., Europe) for profitability could limit near-term growth compared to rivals with stronger emerging-market exposure. Capital allocation (e.g., dividends vs. M&A) remains a key differentiator.