Diageo: An overall satisfying set of results
Diageo: (NEUTRAL, Fair Value 2640p vs. 2340p (-6%))An overall satisfying set of results
Diageo posted an overall satisfying set of results yesterday. Among the group’s three priorities, India was the clear success of 2017/18 while the performance of both scotch and the US was mixed. In 2018/19, we can expect an organic sales growth roughly in line with last year (our estimate: +4.8%) and an organic EBIT margin expansion of 60bp (post +78bp in 2017/18 and +37bp in 2016/17). We maintain our Neutral recommendation but we raise our Fair Value to 2,640p mainly due to the roll-over of our estimates by one year.
Diageo is a premium drinks business based in the United Kingdom. Co. is engaged in producing and distributing spirits, beer and wine. Co.'s operations include producing, distilling, brewing, bottling, packaging, distributing, developing and marketing of a range of brands. The brands that it produces and distributes include Smirnoff vodka, Johnnie Walker scotch whisky, Baileys Original Irish Cream liqueur, Captain Morgan rum, J&B scotch whisky, Tanqueray gin and Guinness stout. In addition, Co. also has the distribution rights for the Jose Cuervo tequila brands in North America and other countries.
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