Stock Price & Analysis

Answer:

Based on current technical indicators and market conditions, it may be advisable to sell DEO stock as it shows bearish signals with RSI below 50 and negative MACD. However, consider holding if you believe in its long-term recovery potential.

Price Prediction for DEO Stock in 2025

Based on current market trends, analyst sentiment, and potential risks, DEO stock is expected to reach $115 in 2025. This prediction is supported by the company's strong market position and brand portfolio, but tempered by risks such as U.S.-EU tariff disputes.

Reasons for the Prediction

1. Tariff Risks: Ongoing trade tensions between the U.S. and EU, particularly threats of 200% tariffs on European alcohol, could impact DEO's exports and profitability.

2. Strong Brand Portfolio: DEO owns iconic brands like Johnnie Walker and Guinness, which provide resilience against market challenges and contribute to its dominant market share in key categories.

3. Analyst Sentiment: While some analysts have lowered their price targets due to macroeconomic headwinds, the overall consensus remains positive, with a price target of $132 implying significant upside potential.

4. Technical Analysis: Current price action and Fibonacci levels suggest support at $109.31, with resistance at $112.72, indicating a potential breakout to $115 in the near term.

Conclusion

DEO stock is expected to trade in the range of $115 to $125 in 2025, driven by its strong fundamentals but constrained by external risks like tariffs. Investors should monitor geopolitical developments and earnings reports for further clarity.

The S1 support level for DEO Stock is $104.22 ,The R1 resistant level for DEO Stock is $107.6.

As of the end of day on 2025-04-01, the price of DEO Stock was $104.51.

The target price for DEO Stock according to analyst rating is 132.00, with the highest price target at 150.00 and the lowest at 117.00. Analysts have a Hold rating on DEO Stock overall.

The market cap of DEO is $232.6B.

Analysis and Insights

Valuation Metrics:

Diageo (DEO) currently has a high price-to-earnings (P/E) ratio of 37.5 compared to the industry average, indicating potential overvaluation. The EV/EBITDA ratio of 23.1 further supports this, as it is significantly higher than sector peers. These metrics suggest investors may be pricing in high growth expectations.

Financial Performance:

Diageo reported a quarterly revenue of $3.68 billion and a net income of $656.59 million, showing a decline from last year's $7.69 billion in revenue and $1.44 billion in net profit. This downward trend raises concerns about justifying its current valuation.

Market and Geopolitical Risks:

The stock has been impacted by tariff threats, dropping 0.7% recently. Escalating trade tensions between the U.S. and EU pose significant risks to Diageo's exports, potentially affecting future profitability.

Analyst Sentiment:

Analysts have mixed views, with a consensus rating of Hold and a price target of $132, implying a 22.61% upside. However, given the current valuation, achieving this target may be challenging without substantial growth.

Conclusion:

Given the high valuation metrics, declining financial performance, and geopolitical risks, Diageo appears overvalued. Investors should exercise caution and consider whether the stock's price aligns with its fundamental value and growth prospects.

Diageo plc is a United Kingdom-based international manufacturer and distributor of premium drinks. It also owns various investments in associates and joint ventures. The Company has a portfolio of approximately 200 brands and sales in 180 countries. Its segments include North America, Europe, Asia Pacific, Latin America and Caribbean, Africa, Supply Chain and Procurement (SC&P), and Corporate and other. The C&P segment manufactures products and includes production sites in the United Kingdom, Ireland, Italy, Guatemala and Mexico, as well as comprises the global procurement function. Its principal products include scotch whisky, other whisk(e)y, vodka, tequila, gin, rum, liqueurs, beer, wine, and no and low alcohol. The Company’s collection of brands includes Johnnie Walker, Crown Royal, J&B and Buchanan's whiskies, Smirnoff, Ciroc and Ketel One vodkas, Captain Morgan, Baileys, Don Julio, and Tanqueray, among others. It also offers Ritual Zero Proof Non-Alcoholic Spirits (Ritual).

Price Prediction for DEO Stock by 2030

Based on current trends and analysis, DEO stock is projected to reach $150 by 2030, driven by its strong market share in premium spirits, brand portfolio resilience, and dividend growth potential.

• Reasons for the Prediction:
  • Market Leadership: DEO holds a dominant 39% market share in Scotch whisky and owns iconic brands like Johnnie Walker and Guinness, providing long-term growth stability [1, 2].
  • Dividend Growth: DEO has consistently increased dividends for 25 years, offering attractive yields for income-focused investors.
  • Global Presence: With sales in nearly 180 countries, DEO is well-positioned to capitalize on emerging markets and premiumization trends.

DEO has a total of 30092 employees.