DEO

We expect management to reset margins for FY2027 while outlining a credible recovery path driven by improved execution, reinvestment and market share stabilization. Operational self-help provides downside protection. Rightsizing supply chain and procurement functions could generate savings exceeding $350m, broadly consistent with management's Accelerate program. Beyond the US, Diageo continues to benefit from resilient international operations, with additional upside from APAC as the baijiu market normalizes.

Beverages - Alcohol industry players face moderation trends and cost pressure, but premiumization, RTD cocktails and low/no-alcohol drinks offer growth paths.

New Diageo PLC (LSE:DGE) boss Dave Lewis' long-awaited strategy update next month is unlikely to remove investor concerns over its biggest market, with UBS arguing expectations for a recovery in US spirits remain too optimistic. In a preview ahead of the drinks group's capital markets day in August, the bank said investors were focused on whether management would reset profit and margin expectations for the 2027 financial year as it attempts to revive sales in North America.

DEO faces weak demand, lower guidance and macro pressure, while innovation in RTDs, Guinness and new flavors aims to defend share and support recovery.

BF.B is banking on premium whiskey, innovation and emerging-market growth, but weak developed-market demand and profit pressure cloud fiscal 2027.

Diageo PLC (LSE:DGE) has increased promotional activity across several of its biggest US spirits brands as it battles to stabilise sales in a challenging market, according to Deutsche Bank. Analyst Mitch Collett said the proportion of Diageo's US sales sold on promotion has been rising year-on-year since October and accelerated further in the latest four-week Nielsen data to 13 June.

Major automakers backed the Environmental ​Protection Agency proposal to ‌delay enforcement of a regulation requiring significant ​cuts in air ​pollution from vehicles for ⁠two years but want ​the agency to ​move quickly to rewrite the rules.

Diageo PLC (LSE:DGE and British American Tobacco PLC (LSE:BATS) are among Citi's preferred consumer stocks heading into the summer, with the bank also expecting brewers and pub operators to benefit from improving trading conditions and this year's FIFA World Cup, which starts in just over two weeks. In spirits, Citi said Diageo could continue to recover after recently reaffirming its guidance for the 2026 financial year and accelerating strategic changes under chief executive Dave Lewis.

RBC Capital Markets sees signs that Diageo PLC (LSE:DGE) is beginning to take firmer control of its underperforming brand portfolio. In a note, the Canadian bank's analysts repeated an 'Outperform' rating and 2,000p price target for the beer and spirits giant.

Diageo plc remains a Buy, supported by resilient performance amid macro headwinds and a valuation offering a margin of safety. DEO's new CEO has accelerated cost-saving initiatives, cut the dividend, and is positioning the company for a turnaround and long-term premiumization trends. Despite near-term consumer weakness in North America and China, DEO's strong premium brands and strategic investments underpin long-term growth potential.