(News Bulletin 247) – Stifel maintains its ‘buy’ rating on Diageo stock, with an unchanged price target of 4,400 pence.
Diageo management recalled that Scotch was its flagship product, representing 27% of consolidated sales in the first half.
Diageo leads the Scotch category with 1.9 times the size of its most direct competitor.
In the US, Diageo owns nearly 40% of the scotch category with gains of ~300bp over the past three years, reports Stifel.
However, in the first half, Diageo’s organic sales growth was only 3% (2% growth in spirits) with volumes down 4%. “According to management, ‘premiumization’ has stalled,” Stifel continues.
In this context, Diageo does not reveal any precise orientation for 2023 but does not question its medium-term orientations (2023-2025), namely an organic growth in sales of 5 to 7% and an organic growth of the EBIT of 6 to 9%.
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