| Valuation method | Value, € | Upside, % |
|---|---|---|
| Artificial intelligence (AI) | 35.30 | 82 |
| Intrinsic value (DCF) | 2212.87 | 11336 |
| Graham-Dodd Method | n/a | |
| Graham Formula | 9.60 | -50 |
Diageo plc (GUI.DE) is a global leader in alcoholic beverages, producing and marketing a diverse portfolio of premium spirits, beer, and wine under iconic brands such as Johnnie Walker, Smirnoff, Guinness, and Don Julio. Headquartered in London, the company operates across North America, Europe, Africa, Latin America, and Asia Pacific, serving a broad consumer base. Diageo’s business model focuses on premiumization, innovation, and strategic acquisitions, reinforcing its dominance in the Beverages - Wineries & Distilleries sector. With a strong presence in both developed and emerging markets, Diageo benefits from brand loyalty, extensive distribution networks, and a resilient demand for alcoholic beverages, making it a key player in the Consumer Defensive industry. The company’s diversified product mix and global footprint provide stability against regional economic fluctuations.
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 focus on high-margin spirits support revenue growth, while its robust dividend yield (€0.93 per share) appeals to income-focused investors. However, risks include exposure to regulatory changes in alcohol consumption, currency volatility, and high debt levels (€18.6B). Diageo’s low beta (0.286) suggests defensive characteristics, but slower growth in mature markets and competition from craft spirits could pressure margins. Investors should weigh its stable cash flows against macroeconomic headwinds affecting discretionary spending.
Diageo’s competitive advantage lies in its unparalleled brand portfolio, extensive distribution network, and economies of scale. The company’s premium brands command pricing power, while its global footprint mitigates regional downturns. Diageo invests heavily in marketing and innovation (e.g., ready-to-drink products) to stay ahead of trends. However, it faces intensifying competition from Pernod Ricard in premium spirits and local craft distilleries, which challenge its market share in niche segments. Diageo’s acquisition strategy (e.g., Casamigos) strengthens its high-growth categories like tequila, but integration risks persist. In emerging markets, Diageo competes with regional players like United Spirits (India) and China’s Kweichow Moutai, where cultural preferences influence demand. While Diageo’s scale provides cost advantages, its reliance on mature markets (North America, Europe) limits growth compared to rivals with stronger emerging market exposure. The company’s ability to balance premiumization with affordability in price-sensitive regions will be critical.