Diageo , the maker of Johnnie Walker scotch, Captain Morgan rum and Guinness stout, will soon begin a new cycle of growth “under a new, heavyweight CFO,” according to Jefferies. The investment bank upgraded shares to buy from hold on Thursday, increasing its price target on Diageo’s U.S.-traded shares to $141 from $129, implying 19% upside potential. Analyst Edward Mundy believes 2025 will be the year that Diageo bottoms before beginning to recover in 2026. Increasing confidence in spirits sector growth and the company’s new chief financial officer will help boost Diageo’s profits and cash, according to Mundy. “Diageo operates in an attractive med-term industry, has an enviable brand portfolio, a strong distribution network and proven marketing capabilities,” Mundy wrote in an 87-page report. “Our upgrade is not about trying to precisely time the [business] cycle; however, the data is not getting worse and destocking is largely complete. The market debate is that lack of growth is structural; our view is that it is cyclical and F25 represents the trough,” the analyst added. The distiller has tumbled 19% in 2024, through Wednesday’s close, but continues to yield some 4.3%, according to FactSet data. Shares jumped as much as 4.8% in early trading Thursday. DEO YTD mountain U.S.-traded shares of Diageo in 2024 Analyst sentiment on the stock is muted. LSEG data shows six analysts rate it as hold or underperform, while two others have a strong buy rating on it.
