Raising Diageo Valuation as Margin Expansion Accompanies Organic Growth, but Story Looks Priced In
With organic trends having now returned much closer to our medium-term expectations of 4%, investors' eyes are now on Diageo's execution of zero-based budgeting and its margin performance. On that score, the company delivered a strong first half to fiscal 2018, with the gross margin of 62.6% a full percentage point above our forecasts. We are nudging up our fair value estimate to GBX 2,500 from GBX 2,400 on the impact of the time value of money and a slightly more optimistic margin assumption, m...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.
Morningstar, Inc. is a leading provider of independent investment research in North America, Europe, Australia, and Asia. The company offer an extensive line of products and services for individual investors, financial advisors, asset managers, and retirement plan providers and sponsors.
Morningstar provides data on approximately 530,000 investment offerings, including stocks, mutual funds, and similar vehicles, along with real-time global market data on more than 18 million equities, indexes, futures, options, commodities, and precious metals, in addition to foreign exchange and Treasury markets. Morningstar also offers investment management services through its investment advisory subsidiaries and had approximately $185 billion in assets under advisement and management as of June 30, 2016.
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