Upside case
Bull case
$439+418.6%
DEO would need investors to value it at roughly 94x earnings — about 76x more generous than today's 18x forward P/E. That requires meaningful multiple expansion on top of continued earnings growth.
Analysis OverviewHoldUpdated May 1, 2026
Diageo plc (DEO) Stock Analysis
Wall Street verdict, consensus price target, and analyst rating breakdown — everything needed to frame the risk/reward at today's price.
Analyst consensus
Hold
Covering
35
analysts
15 bullish · 4 bearish · 35 covering DEO
Strong Buy
0
Buy
15
Hold
16
Sell
4
Strong Sell
0
Consensus Target
$124
+46.6% vs today
Scenario Range
$158 – $439
Model bear to bull value window
Coverage
35
Published analyst ratings
Valuation Context
18.1x
Forward P/E · Market cap $47.0B
DEO price targets
Three scenarios for where DEO stock could go
Current
~$85
Confidence
36 / 100
Updated
May 1, 2026
Where we are now
Current · $85
Bear
$158
Base
$208
Bull
$439
Market caseClosest to today
Base case
$208+146.4%
At 45x on FY1 earnings, the base case reflects a reasonable but not stretched valuation. It prices in continued growth without assuming an exceptional setup.
Stress case
Bear case
$158+86.6%
The bear case assumes sentiment or fundamentals disappoint enough to push DEO down roughly 87% from the current price.
Not financial advice. Model confidence reflects internal scenario assumptions, not a guarantee of returns. Past performance does not predict future results.
Diageo plc
DEO · NYSEConsumer DefensiveBeverages - Wineries & DistilleriesJune year-end
Diageo is a global spirits and beer company that produces and markets premium alcoholic beverages across more than 180 countries. It generates revenue primarily through spirits sales—which contribute roughly 80% of net sales—and beer sales—about 20%, with its portfolio of over 200 brands including Johnnie Walker, Smirnoff, Guinness, and Tanqueray. The company's key competitive advantage lies in its powerful portfolio of iconic global brands with deep consumer loyalty, extensive global distribution network, and premiumization strategy that drives higher-margin sales.
Market Cap
$47.0B
Revenue TTM
$37.4B
Net Income TTM
$5.5B
Net Margin
14.7%
DEO Revenue and Earnings Performance
Quarterly beat-or-miss track record against analyst estimates, plus forward revenue and EPS outlook for the next two fiscal years.
EPS Beat Rate
17%Exceptional
12 quarters tracked
Revenue Beat Rate
33%Exceptional
vs consensus estimates
Avg EPS Surprise
-28.8%
above Street consensus
Beat / Miss Record
BeatMissLeft = EPS · Right = Revenue
Q3 2024
Q4 2024
Q3 2025
Q1 2026
Last 4 Quarters
EPS beats: 2 of 4Q3 2024
EPS
$2.97/$2.85
Revenue
$9.3B/$9.2B
Q4 2024
EPS
$3.47/$4.25
Revenue
$10.9B/$10.7B
Q3 2025
EPS
$0.76/$2.48
Revenue
$9.4B/$9.4B
Q1 2026
EPS
$3.80/$3.67
Revenue
$10.5B/$10.5B
| Quarter | EPS (Actual / Est) | EPS Surprise | Revenue (Actual / Est) | Rev Surprise |
|---|---|---|---|---|
| Q3 2024 | $2.97/$2.85 | +4.2% | $9.3B/$9.2B | +1.3% |
| Q4 2024 | $3.47/$4.25 | -18.4% | $10.9B/$10.7B | +1.4% |
| Q3 2025 | $0.76/$2.48 | -69.4% | $9.4B/$9.4B | +0.6% |
| Q1 2026 | $3.80/$3.67 | +3.5% | $10.5B/$10.5B | -0.6% |
FY1–FY2 Estimates
Revenue Outlook
FY1
$36.0B
-3.7% YoY
FY2
$38.0B
+5.5% YoY
EPS Outlook
FY1
$9.67
-1.8% YoY
FY2
$10.45
+8.1% YoY
Trailing FCF (TTM)$7.7B
FCF Margin: 20.6%
Next Earnings
—
Expected EPS
—
Expected Revenue
—
DEO beat EPS estimates in 2 of 4 tracked quarters. Mixed delivery makes the upcoming report a key data point for re-rating.
DEO Revenue Breakdown by Segment
Product and geographic revenue mix from the latest annual disclosure, with year-over-year growth by segment.
Latest disclosure
FY 2025
Total disclosed revenue $28.0B
Product Mix
Latest annual revenue by segment or product family
Spirits
79.3%
-1.1% YoY
Tap, hover, or focus a slice to inspect segment detail.
Geographic Mix
Latest annual revenue by reported region
Rest Of World
48.6%
-1.1% YoY
Tap, hover, or focus a slice to inspect segment detail.
Spirits is the largest disclosed segment at 79.3% of FY 2025 revenue, down 1.1% YoY.
Rest Of World is the largest reported region at 48.6%, down 1.1% YoY.
DEO Valuation Snapshot
Current multiples compared to the S&P 500, the company's sector, and its own five-year average.
Relative Value Signal
Significantly Undervalued
Fair value est. $158 — implies +98.2% from today's price.
Upside to Fair Value
98.2%
potential upside
Deep DiscountFair ValueVery Expensive
vs S&P 500 Trailing P/E
DEO
19.9x
vs
S&P 500
25.2x
21% discount
vs Consumer Defensive Trailing P/E
DEO
19.9x
vs
Consumer Defensive
19.6x
In line with benchmark
vs DEO 5Y Avg P/E
Today
19.9x
vs
5Y Average
26.5x
25% discount
Forward PE
18.1x
S&P 500
19.1x
-5%
Consumer Defensive
14.6x
+23%
5Y Avg
—
—
Trailing PE
19.9x
S&P 500
25.2x
-21%
Consumer Defensive
19.6x
+2%
5Y Avg
26.5x
-25%
PEG Ratio
2.68x
S&P 500
1.75x
+53%
Consumer Defensive
1.85x
+44%
5Y Avg
—
—
EV/EBITDA
11.4x
S&P 500
15.3x
-25%
Consumer Defensive
11.4x
-0%
5Y Avg
19.5x
-41%
Price/FCF
17.5x
S&P 500
21.3x
-18%
Consumer Defensive
15.7x
+11%
5Y Avg
26.4x
-34%
Price/Sales
2.3x
S&P 500
3.1x
-26%
Consumer Defensive
0.8x
+175%
5Y Avg
5.3x
-56%
Dividend Yield
4.88%
S&P 500
1.88%
+160%
Consumer Defensive
2.73%
+78%
5Y Avg
2.58%
+89%
| Metric | DEO | S&P 500 | Consumer Defensive | 5Y Avg DEO |
|---|---|---|---|---|
| Forward PE | 18.1x | 19.1x | 14.6x+23% | — |
| Trailing PE | 19.9x | 25.2x-21% | 19.6x | 26.5x-25% |
| PEG Ratio | 2.68x | 1.75x+53% | 1.85x+44% | — |
| EV/EBITDA | 11.4x | 15.3x-25% | 11.4x | 19.5x-41% |
| Price/FCF | 17.5x | 21.3x-18% | 15.7x+11% | 26.4x-34% |
| Price/Sales | 2.3x | 3.1x-26% | 0.8x+175% | 5.3x-56% |
| Dividend Yield | 4.88% | 1.88% | 2.73% | 2.58% |
DEO trades above S&P 500 benchmarks on 1 of 6 measured multiples — appears modestly priced relative to the S&P 500 on most measures.
Forward P/E and PEG reflect analyst consensus estimates. Historical averages use trailing ratios where forward data is unavailable.S&P 500 and sector benchmarks both use trailing median P/E — similar readings indicate the broader index and sector are priced alike.
Open valuation toolDEO Financial Health
Verdict
Strong
DEO generates $7.7B in free cash flow at a 20.6% margin — returns 4.9% of market cap to shareholders annually.
Cash Engine
Revenue, margins, and cash generation
Revenue (TTM)
Trailing-twelve-month sales base
$37.4B
Revenue Growth
TTM vs prior year
-4.2%
Gross Margin
Gross profit as a share of revenue
60.0%
Operating Margin
Operating income divided by revenue
27.9%
Net Margin
Net income divided by revenue
14.7%
EPS (TTM)
Diluted earnings per share, trailing twelve months
$9.85
Free Cash Flow (TTM)
Cash generation after capex
$7.7B
FCF Margin
FCF as share of revenue — the primary cash quality signal
20.6%
Capital Quality
ROIC, leverage, and debt serviceability
ROIC
Return on invested capital — primary competitive quality signal
9.6%
ROA
Return on assets, trailing twelve months
14.7%
Cash & Equivalents
Liquid assets on the balance sheet
$2.2B
Net Debt
Total debt minus cash
$22.2B
Debt Serviceability
Net debt as a multiple of annual free cash flow
2.9× FCF
~2.9 years to full repayment at current FCF run-rate
ROE *
Return on equity, trailing twelve months
54.0%
* Elevated by buyback-compressed equity — compare ROIC (9.6%) for an undistorted picture of capital efficiency.
Shareholder Returns
How capital is returned to owners
Total shareholder yield
4.9%
Dividend
4.9%
Buyback
0.0%
Share Repurchases
Trailing buyback outflow — dollar magnitude of capital returned
$0
Dividend / Share
Annualized trailing dividend per share
$4.13
Payout Ratio
Share of earnings distributed as dividends
97.6%
Shares Outstanding
Current diluted share count
557M
All figures from the trailing twelve months. ROIC uses invested capital (equity + net debt). ROE marked * where buyback-compressed equity base may inflate the figure.
Open full ratios pageDEO Stock Risk Factors
Key factors that could pressure the stock price, compress the multiple, or weigh on future results.
AI analysis · updated April 11, 2026
High Risk
Debt Levels
Deere has a significant amount of debt, with a high debt‑to‑equity ratio, which can constrain financial flexibility and increase borrowing costs. Elevated leverage heightens the risk of liquidity strain if earnings decline or interest rates rise.
High Risk
Agricultural Market Cyclicality
The company’s revenue is heavily tied to the agricultural business cycle, which is sensitive to macro‑economic factors such as unemployment, interest rates, inflation, and consumer spending. A downturn in farm demand can sharply reduce equipment sales and compress margins.
Medium
Tariff Impacts
Tariffs on imported components or finished goods can raise production costs and limit pricing power. Increased tariffs may erode profit margins and reduce competitiveness in key markets.
Medium
Technology System Reliance
Deere depends on integrated technology systems for manufacturing, logistics, and customer support. System failures, inefficiencies, or obsolescence can cause operational delays, lower product demand, and reputational damage.
Medium
Supply Chain Disruptions
Inaccurate inventory forecasting or supply chain interruptions can lead to unmet market demand, production delays, higher costs, or excess inventory. Such disruptions can negatively impact sales and cash flow.
Lower
Climate‑Related Risks
Physical risks from extreme weather events and transition risks from regulatory changes related to climate change could affect operations, supply chains, and product demand. These risks may increase operating costs or require capital expenditures.
These are risk mechanisms, not predictions. The key question is which would force a cut to earnings estimates or a lower multiple than the market currently prices in.
Why DEO Stock Could Outperform
Structural drivers behind the upside case and why the stock could outperform over the next 12 months.
AI analysis · updated April 11, 2026
Premium Brands & Pricing Power
Diageo owns iconic brands such as Johnnie Walker, Guinness, Smirnoff, and Don Julio. These brands give it pricing power to pass rising costs to consumers, sustaining resilient profitability even in downturns. Dominance in whiskey and tequila categories helps maintain strong margins.
Premiumization Trend Drives Growth
The company’s “drink less, drink better” strategy taps a consumer shift toward higher‑quality, premium beverages. This trend allows Diageo to keep or grow revenue and margins even if overall consumption volumes fall.
Global Diversification Mitigates Risk
Diageo operates in the Americas, Europe, Africa, Asia, and Latin America. The broad geographic footprint spreads exposure and cushions the business against regional economic downturns.
Dividend Yield & Growth Catalyst
The stock currently yields between 4.65% and 6.31%. Management expects to sustain or raise the dividend, backed by solid earnings estimates and free‑cash‑flow generation.
New CEO Fuels Recovery
A newly appointed CEO with a turnaround track record is steering accelerated cost‑saving measures. This leadership change is viewed as a catalyst for a recovery and long‑term value creation.
A real bull case compounds — each driver matters most when it strengthens margins, supports capital returns, and keeps the company above the market's minimum growth bar simultaneously.
DEO Stock Price Performance
52-week range context and price returns across multiple time horizons. Dividend contribution is shown separately in the Capital Return section.
Current Price
$84.58
52W Range Position
27%
52-Week Range
Current price plotted between the 52-week low and high.
52-Week Low
$72.46
+16.7% from the low
52-Week High
$116.69
-27.5% from the high
1 Month
+12.89%
3 Month
-12.70%
YTD
-2.9%
1 Year
-26.2%
3Y CAGR
-23.3%
5Y CAGR
-14.2%
10Y CAGR
-2.5%
Range context matters because valuation compression and earnings misses rarely hit from the same starting point. A stock already far below its high can still fall, but it is no longer carrying the same embedded optimism as one pressing a fresh peak.
DEO vs Peers
Valuation, growth, and margin comparison against the closest publicly traded peers for this company.
Peer Set
Accurate peer set
Forward PE
18.1x
vs 12.9x median
+40% above peer median
Revenue Growth
-3.7%
vs -1.2% median
-222% below peer median
Net Margin
14.7%
vs -3.3% median
+544% above peer median
| Company | Mkt Cap | Fwd PE | Rev Grw | Margin | Rating | Upside |
|---|---|---|---|---|---|---|
DEO DEO Diageo plc | $47.0B | 18.1x | -3.7% | 14.7% | Hold | +46.6% |
STZ STZ Constellation Brands, Inc. | $26.4B | 12.9x | +0.8% | 11.8% | Buy | +15.4% |
BEA BEAM Beam Therapeutics Inc. | $3.3B | — | -1.2% | -57.2% | Buy | +26.3% |
SAM SAM The Boston Beer Company, Inc. | $2.2B | 20.9x | +0.2% | -2.9% | Hold | +19.6% |
MGP MGPI MGP Ingredients, Inc. | $413M | 12.2x | -13.1% | -46.0% | Buy | +50.1% |
WVV WVVI Willamette Valley Vineyards, Inc. | $14M | — | -4.8% | -3.3% | — | — |
This peer comparison reflects companies with similar business models, product lines, or market positioning, supplemented by industry grouping when direct matches are limited.
DEO Dividend and Capital Return
DEO returns 4.9% total yield, led by a 4.88% dividend, raised 12 consecutive years.
Dividend At RiskFCF Well Covered
Total Shareholder Yield
4.9%
Dividend + buyback return per year
Buyback Yield
0.0%
Dividend Yield
4.88%
Payout Ratio
97.6%
How DEO Splits Its Return
Div 4.88%
Dividend 4.88%Buybacks 0.0%
Dividend Profile
Yield, cadence, and growth quality
Dividend / Share
Trailing annualized cash dividend
$4.13
Growth Streak
Consecutive years of dividend increases
12Y
3Y Div CAGR
2.5%
5Y Div CAGR
2.6%
Ex-Dividend Date
—
Payment Cadence
Semi-Annual
2 payments over the last 12 months
Buyback Engine
How much per-share support comes from repurchases
Repurchases (TTM)
Cash used for buybacks in the latest trailing period
$0
Estimated Shares Retired
0
Approx. Share Reduction
0.0%
Shares Outstanding
Current diluted share count from the screening snapshot
557M
| Year | Div / Share | YoY Grw | BB Yield | Total Yield |
|---|---|---|---|---|
| 2026 | $0.76 | — | — | — |
| 2025 | $4.14 | 0.0% | 0.0% | 4.1% |
| 2024 | $4.14 | +2.5% | 2.4% | 5.5% |
| 2023 | $4.04 | +4.9% | 1.7% | 3.8% |
| 2022 | $3.85 | -4.1% | 2.7% | 4.8% |
FAQ
7 questionsDEO Investor Questions
Common questions answered from live analyst data and company financials.
01Is Diageo plc (DEO) stock a buy or sell in 2026?
Diageo plc (DEO) is rated Hold by Wall Street analysts as of 2026. Of 35 analysts covering the stock, 15 rate it Buy or Strong Buy, 16 rate it Hold, and 4 rate it Sell or Strong Sell. The consensus 12-month price target is $124, implying +46.6% from the current price of $85. The bear case scenario is $158 and the bull case is $439.
02What is the DEO stock price target for 2026?
The Wall Street consensus price target for DEO is $124 based on 35 analyst estimates. The high-end target is $124 (+46.6% from today), and the low-end target is $124 (+46.6%). The base case model target is $208.
03Is Diageo plc (DEO) stock overvalued in 2026?
DEO trades at 18.1x times forward earnings. The stock currently trades at a discount to the broader market. Based on current multiples versus the peer group, the relative model signals significantly undervalued. Whether the stock is over or undervalued ultimately depends on whether consensus earnings estimates are achievable.
04What are the main risks for Diageo plc (DEO) stock in 2026?
The primary risks for DEO in 2026 are: (1) Debt Levels — Deere has a significant amount of debt, with a high debt‑to‑equity ratio, which can constrain financial flexibility and increase borrowing costs. (2) Agricultural Market Cyclicality — The company’s revenue is heavily tied to the agricultural business cycle, which is sensitive to macro‑economic factors such as unemployment, interest rates, inflation, and consumer spending. (3) Tariff Impacts — Tariffs on imported components or finished goods can raise production costs and limit pricing power. Each factor has the potential to pressure earnings or compress the stock's valuation multiple.
05What is Diageo plc's revenue and earnings forecast?
Analyst consensus estimates DEO will report consensus revenue of $36.0B (-3.7% year-over-year) and EPS of $9.67 (-1.8% year-over-year) for the upcoming fiscal year. The following year, analysts project $38.0B in revenue.
06When does Diageo plc (DEO) report its next earnings?
A confirmed upcoming earnings date for DEO is not yet available. Check the Earnings section above for the most recent quarterly report dates and forward estimates.
07How much free cash flow does Diageo plc generate?
Diageo plc (DEO) generated $7.7B in free cash flow over the trailing twelve months — a free cash flow margin of 20.6%. DEO returns capital to shareholders through dividends (4.9% yield) and share repurchases ($0 TTM).