I bought the stock after its first profit warning in November 2023 and I’ve averaged down three times since. Despite that, I’m down almost 35%.

The cost-of-living crisis has battered Diageo’s premium drinks strategy as consumers trade down to cheaper brands. The weakness first appeared in Latin America and the Caribbean but quickly spread to the US, Europe and China. It was aggravated by US tariffs, currency volatility, Gen Z sobriety and the rise of GLP-1 weight-loss drugs.

Can this FTSE 100 stock recover?

Contrarians who got excited by the recovery story and threw £10,000 at the Johnnie Walker, Baileys, Smirnoff, Guinness and Tanqueray maker last week will have a bitter aftertaste today. The Diageo share price opened at 1,609p on 28 May. Today (4 June) it trades at 1,485p. That’s a fall of 7.7%, reducing that £10k stake to £9,230. It’s a paper loss of £770 in a matter of days.

Of course, shares move up and down all the time and investors should look beyond short-term setbacks. But the longer-term trend is grim. Diageo shares have plunged 25% over one year and almost 55% over five.

Dividends may soften the blow, but not by much. Especially after new broom CEO Sir David Lewis halved the interim payout on 25 February.

Can Lewis rescue Diageo?

Lewis also cut guidance after sales and underlying operating profit both dropped 2.8%. That triggered Diageo’s worst trading day on record, with the shares plunging 12.7% in a single session. This tipple is all hangover and no fizz. A quick glance at operating profit over the last five years explains why.

• 2025 — $4.34bn
• 2024 — $6bn
• 2023 — $5.55bn
• 2022 — $5.9bn
• 2021 — $5.16bn

The sharp 2025 decline largely reflected impairment charges and restructuring costs, but the figures still make sober reading. Diageo’s Q3 trading update on 6 May brought some relief though. Sales edged up 0.3% to $4.5bn. Analysts had expected a 2.3% decline. Earlier Easter trading helped (but could impact Q4). So did advance trade buying ahead of the FIFA World Cup.

I still see reasons for optimism. Lewis engineered a remarkable turnaround at Tesco and I’m backing him to repeat the trick here. He began his tenure at Tesco in 2014 by chucking every bit of bad news at investors, a process known as kitchen sinking. That hammered expectations and created a lower base for recovery. He’s followed the same script at Diageo. Arguably, he had little choice. There’s so much bad news here.

Is the share price finally cheap enough?

Diageo also carries net debt above $20bn and rising interest rates make that more expensive to service. One thing looks cheap though. The valuation. The group’s price-to-earnings ratio has slipped to around 12, the lowest I can remember.

Lewis will slash costs and push disposals to reduce debt, and I’ll be watching his progress like a hawk. I’m sorely tempted to average down again, but Diageo’s recovery may take a while yet.

Should you invest £5,000 in Diageo Plc right now?

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Harvey Jones owns shares in Diageo

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Today, sentiment could hardly be more different. After losing more than 60% of its value, many investors have given up on the drinks giant altogether. I think that’s exactly why it’s worth another look.

The investment case is changing

For the past two years, the Diageo story has largely been framed around recovery. US spirits demand weakened, inventories built up, and investors waited for conditions to improve.

But increasingly, I think that’s the wrong lens.

What stands out from the recent trading update is that management appears less focused on waiting for the market to recover and more focused on improving the company’s competitive position.

In the US, the group is testing new pricing strategies, repositioning key brands such as Casamigos and taking a fresh look at where it can compete most effectively.

The upcoming August strategy update could therefore be more important than the next set of sales figures. If Diageo can emerge as a leaner, more competitive business, future growth may depend less on a cyclical recovery and more on management execution. For long-term investors, that could ultimately prove the more important catalyst.

Strategy refresh

Since taking the helm, Dave Lewis has moved quickly to simplify the business and improve financial flexibility. The Accelerate programme remains on track to deliver around $300m of cost savings by the end of 2026, while asset disposals are helping reduce debt and strengthen the balance sheet.

More importantly, management appears willing to challenge long-held assumptions. Rather than simply blaming weak US spirits demand, it’s reviewing pricing, portfolio positioning, and customer strategy across key categories. Early changes are already being tested in tequila, where Diageo is attempting to improve competitiveness without sacrificing brand strength.

Investors will learn more at the August strategy update, but the direction of travel is already becoming clearer. The focus appears to be shifting from defending market share to building a more efficient and adaptable business capable of delivering growth even in a tougher consumer environment.

What’s the verdict

Of course, none of this guarantees success. The US remains challenging, tequila competition is intense, and consumer spending is still under pressure in many markets.

However, what interests me is that management appears increasingly focused on the factors it can control. These are delivering meaningful cost savings, reducing debt, and repositioning the portfolio.

For me, the August strategy update now looks like the key event. Investors don’t need evidence that Diageo owns great brands — that’s never been in doubt. Instead, they need confidence that those brands can return to sustainable growth in a changing market.

After years of disappointing share price performance, I think that question matters far more than whether the next quarter’s sales rise or fall.

That’s why I see Diageo less as a recovery play and more as a potential turnaround story. If management can deliver on its strategic ambitions, today’s valuation could eventually look far too pessimistic. That’s why I view the stock as one to consider.

Should you invest £5,000 in Diageo Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Diageo Plc made the list?

Andrew Mackie owns shares in Diageo.

The post Down 63%, are Diageo shares now a generational buying opportunity? appeared first on The Twelfth Magpie.

Looking for investment opportunities linked to this exciting event? Here are three stocks to check out.

Apparel demand will be high

One thing we always see during World Cups is heavy spending on football apparel. So, Sports Direct owner Frasers Group (LSE: FRAS) could be worth a look right now.

I expect it to see strong sales over the next few months as consumers load up on England shirts and other kit. Note that if you have a Frasers Plus account, the shirts are cheaper here than at other major retailers.

In terms of the valuation, this stock looks pretty cheap at the moment. Analysts are expecting earnings per share of 98p this year and the forward-looking price-to-earnings (P/E) ratio is only around eight. That means there could be some value on offer.

That said, there are plenty of risks here in the medium/long term including brand risk (Frasers owns a ton of brands today), ownership risk (ex-CEO Mike Ashley owns around 70% of the shares) and macroeconomic risk. So, it’s not a stock I’d go ‘all in’ on.

Booze sales will rocket

Another thing that tends to spike during World Cups is booze sales. Typically, a lot of alcohol is consumed while the tournament is going on.

This could benefit FTSE 100 alcoholic beverages powerhouse Diageo (LSE: DGE). It’s the owner of Guinness, Tanqueray, Johnnie Walker, and many other well-known names.

Now, like Frasers, there are risks to be aware of with this name. Today, many people are drinking less alcohol due to health concerns and/or GLP-1 weight-loss drugs. As a result sentiment towards the shares is weak.

Yet the stock is a long way off its highs right now (more than 50%). And at current levels, it looks pretty cheap (the forward-looking P/E ratio is only around 13). So, I think it could be worth a closer look.

What about security?

My last pick is a little more out of left field. It’s Nasdaq-listed public security specialist Axon Enterprise (NASDAQ: AXON).

I expect security to be taken very seriously during this tournament given the geopolitical backdrop. And I see Axon, which offers everything from TASERs to anti-drone solutions, as well placed to benefit.

It’s worth noting that Axon has recently mentioned that its ‘Dedrone’ solutions – which can detect, identify, track, and mitigate unauthorised or rogue drones – are going to be used to protect stadiums at this year’s World Cup. Ultimately, they’re a central part of the airspace security framework for the event.

Now, the P/E ratio here is in the 60s which adds risk. If Q2 earnings are disappointing the share price is likely to fall. However, I’m comfortable with the valuation given the company’s rate of growth with nine consecutive quarters of 30%+ revenue growth. I believe the shares are worth considering for a diversified portfolio.

Should you invest £5,000 in Diageo Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Diageo Plc made the list?

Edward Sheldon owns shares in Diageo, Axon Enterprise, and Nasdaq

The post 3 shares to consider buying for the 2026 World Cup appeared first on The Twelfth Magpie.

Let’s not forget we have a share price that is still 53% off a previous high. Could the next few days be a cheap buying opportunity? Should I buy Diageo shares before the World Cup begins?

Crucial times

The reason the next few months could be crucial for Diageo begins with the recent decline. The shares have been falling for a variety of reasons, including changes in consumption habits (like Gen Z drinking less) and a switch to lower-priced alcohols (because of the cost-of-living crisis).

Nowhere were these problems more pronounced than in the US. America is the company’s largest market but has seen sales volume of many of its products falling at an alarming rate. Tequila is the spirit most affected, with Casamigos and Don Julio both taking a large share of the worst of it.

That the World Cup is being held in the US (as well as Canada and Mexico) could prove to be very timely indeed. The new CEO Dave Lewis was only installed a few months ago and will be hoping the world’s second-largest sporting event could put the afterburners on the share price.

What is going to happen?

So what’s the plan? Lots of advertising, basically. With so many eyes on the premier footballing event, Diageo aims to showcase its brands like Don Julio, Buchanan’s, Casamigos, Johnnie Walker, and Smirnoff. One of the more interesting sounding ploys is a Don Julio 1942 bottle of tequila that is golden and shaped like the World Cup trophy!

Adjustments to the pricing of various products is being tried out, too. The ‘premiumisation’ model of going for the upper end of the market has backfired to a degree in the States. Therefore the company aims to find price points more suitable to current economic conditions.

One World Cup is hardly likely to turn around a £35bn company all by itself. And I don’t think the news is compelling enough to get me to add to my position. But it could be a welcome fillip for a stock that has already begun the turnaround.

Diageo shares are up 17% since April. Only time will tell if the company has truly turned the corner. Either way, I think the stock is worth considering.

Should you invest £5,000 in Diageo Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Diageo Plc made the list?

John Fieldsend owns shares in Diageo.

The post Should I buy Diageo shares before the World Cup kicks off? appeared first on The Twelfth Magpie.

Let’s take a closer look and see why this has yet to happen and, more importantly, what might happen during the remainder of the year.

A fallen giant

Diageo is huge. On the plus side, this means it has the financial resources necessary to follow a new strategy. However, given its size, any turnaround is likely to take some time.

The group’s new boss, Sir Dave Lewis, who took up his role at the start of January, has now had time to come up with a plan to overcome an industry-wide problem of people drinking less and other behavioural changes.

And it looks as though he believes ready-to-drink (RTD) beverages are part of the solution. He reckons they could be “a very significant and profitable opportunity”. This is understandable given that it’s the only sector of the spirits market that’s growing.

Diageo hopes that its stable of instantly-recognisable brands will be well received in this fashionable segment. The group’s started selling 100ml cans of some of its cocktails to go alongside larger bottles. The smaller size is intended to appeal to those on a picnic or at the beach.

However, new entrants are likely to be attracted by a growing market and could yet throw a spanner in the works.

I’m particularly encouraged by the way that the… Diageo team, is engaging in the strategic refresh and the rethinking around how it is we can be more competitive and effective as an organisation.

Sir Dave Lewis, Diageo CEO, May 2026

Are we there yet?

Look closely and it’s possible to see some small green shoots of a recovery. During the quarter ended 31 March 2026, organic net sales increased by 0.3% and volumes rose by 0.4%, compared to the same period a year earlier.

However, the group still has a large debt pile – which increased during the second half of 2026 – and it recently announced a cut in its dividend to help address this.

Personally, I have confidence in Diageo and its boss, who established a formidable reputation at Tesco and Unilever. In particular, Sir Dave seems highly effective at stripping out waste and getting a business to focus on its strengths.

Indeed, I think the group will start to recover soon. It has an impressive stable of brands, including Johnnie Walker, Guinness, and Smirnoff which, and the trend towards ‘premiumisation’ (drinking better, not more), should be to its benefit.

Indeed, the majority of analysts appear to agree with me. The consensus is that the stock’s approximately 20% undervalued. And of the 22 covering it, 14 rate it a Buy. Only two are advising their clients to sell.

On balance, I still think it’s one to consider and I can understand why a number of analysts tipped it at the start of the year. However, it’s likely to appeal only to patient investors. Those in a hurry are likely to find better opportunities elsewhere.

Should you invest £5,000 in Diageo Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Diageo Plc made the list?

James Beard does not hold any positions in the companies mentioned.

The post Are Diageo shares on the turn? appeared first on The Twelfth Magpie.

But they can continue to struggle amid weakness in the US spirits market and softer demand in China. While the past two months have shown early signs of a recovery, they’re still down 21.2% since this time last year.

In recent Q3 results, North America organic net sales declined 9.4%, reflecting ongoing weakness in the region. Data suggests that changing drinking habits and cautious spending may be disproportionally impacting premium brands.

So is Diageo feeling the brunt of short-term economic weakness, or could there be a deeper story here?

The answer will dictate whether it’s a good value stock to consider at this price. Let’s look deeper.

A promising turnaround story

Supply chain shocks and economic pressure are real factors that are putting heavy pressure on premium spirit sales. Despite a portfolio of strong and enduring brand names, Diageo’s latest Q3 results highlight the challenge clearly.

New CEO Sir Dave Lewis is cutting costs, simplifying the portfolio, and rebuilding trust with investors after a recent dividend cut and downgraded outlook.

North America remains our biggest challenge, where market conditions are soft and our offer needs to be more competitive. Actions are already under way to address this.

Dave Lewis, Tesco CEO.

Third-quarter organic net sales grew 0.3%, with strong gains across three regions:

• Europe: +8.8%.
• Latin America and Caribbean (LAC): +16.2%.
• Africa: +17%.

The growth’s helped offset continued US and Asia-Pacific weakness.

The company reiterated its full-year fiscal 2026 guidance, forecasting organic net sales to decline 2%-3% and organic operating profit growth ranging from flat to low-single-digit growth.

But is this enough to turn Diageo around?

Not just a dividend play

Income-wise, Diageo still shows promise, but it’s no longer the whole story. The yield currently sits around 5%, with investors watching closely whether management can restore growth.

But for me, the real story here is value. If the turnaround strategy works, it could unfold as a Roll-Royce-style recovery story. If the company regains the momentum it enjoyed between 2010 and 2020, I’d expect gains of 200%-300% in the coming years.

Based on future cash flow estimates, analysts believe the shares to be trading anywhere between 24%-49% below fair value.

Still, it all depends heavily on sales trends in North America, guidance updates, and management’s restructuring moves. 

A drawn-out economic downturn or recession could further drive consumers toward lower-cost alternative brands. And any further dividend cuts or lowered guidance would impact investor sentiment and hurt the share price.

The bottom line

Diageo isn’t a small cyclical company. It owns global brands people know well — Johnnie Walker, Guinness, Smirnoff and Tanqueray. But even so, changing tastes and economic hardship have taken their toll.

Whether or not investors think it’s worth considering depends on how much they believe in the recovery story.

Personally, I see a long-term value opportunity here, and I don’t plan to miss it. So I’ll be slowly topping up my position incrementally throughout the year.

Should you invest £5,000 in Diageo Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Diageo Plc made the list?

Mark Hartley owns shares in Diageo.

The post Here’s why I’m bullish about a Rolls-Royce-style recovery for Diageo shares appeared first on The Twelfth Magpie.

Investors spend enormous amounts of time searching for the next opportunity. Yet some of the strongest returns are often found not in fashionable stories, but in businesses where sentiment has deteriorated and others have become reluctant to look.

When sentiment overshoots

The stock market often moves fastest when confidence changes direction. That can create opportunity — but only if investors distinguish between temporary weakness and permanent decline.

Diageo (LSE: DGE) is an interesting example.

Despite recovering around 18% from recent lows, the shares remain well below previous highs after several years of disappointing sentiment surrounding global spirits demand.

At the heart of the debate is a simple question: is the market correctly pricing a weaker future, or has it become too pessimistic about what is ultimately a cyclical slowdown?

Changing behaviour, not disappearing demand

The weakness in Diageo shares reflects genuine pressures. Higher living costs have forced many consumers to become more selective, moderating spending and trading down across parts of the drinks market.

But this is where I think the market may be drawing the wrong conclusion.

Spirits demand itself does not appear to be collapsing. Rather, consumer behaviour is evolving. People are still drinking, but they are becoming more price-conscious and flexible in how they buy and consume.

Management’s response reflects that shift.

Rather than relying solely on premiumisation, the group is broadening its reach through smaller formats, wider price points, and faster-growing categories such as ready-to-drink products. To me, that looks less like a business losing relevance and more like one adapting to changing cycle conditions.

That distinction matters because Diageo’s long-term investment case has never rested on a single spending trend. Its strength lies in global brands, distribution scale, and the ability to participate across different consumer behaviours and markets.

Of course, risks remain. If consumer weakness proves more persistent or premium spending takes longer to recover, earnings growth may remain subdued.

Even so, this may be where the stock market occasionally gets things wrong. Weak sentiment and weaker fundamentals are not always the same thing. For patient investors, that can create opportunity.

Closing remarks

Importantly, Diageo is not a business trying to reinvent itself or chase an entirely new market. Its brands already occupy leading positions globally, and management’s task is largely one of adaptation and execution rather than wholesale transformation.

That matters because long-term returns in consumer staples are rarely built through rapid change. More often, they come from resilient demand, pricing power, and patient ownership through weaker parts of the cycle.

If current pressures ultimately prove cyclical rather than structural, today’s valuation and sentiment may come to look overly pessimistic.

The stock market does not always get the future right first time.

For investors willing to look beyond near-term uncertainty, I think Diageo remains one worth considering.

Should you invest £5,000 in Diageo Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Diageo Plc made the list?

Andrew Mackie owns shares in Diageo.

The post What the stock market gets wrong — and why that creates opportunity appeared first on The Twelfth Magpie.

After the pandemic, inflation surged and drinkers tightened their belts. Diageo shares started to slide and things came to a head on 10 November 2023. The board shocked markets by slashing guidance after sales in Latin America and the Caribbean plunged 20%. The region generated roughly 11% of group revenues.

Why did this FTSE 100 stock keep falling?

Drinkers traded down to cheaper local brands while distributors wrestled with excess stock. Soon, the weakness spread to the US, Europe, and China. Donald Trump’s tariffs added to the pain by hitting Mexican tequila and Canadian whisky exports to the US. Anxious investors started to worry about the impact of Gen Z sobriety and GLP-1 weight-loss drugs too.

I averaged down repeatedly but the shares only fell further.. A quick glance at its full-year net profits shows why.

• 2025 – $2.54bn
• 2024 – $3.87bn
• 2023 – $4.45bn
• 2022 – $4.33bn
• 2021 – $3.95bn

Today, Diageo shares are down a thumping 53% over five years and 20% over 12 months. Yet, lately, the mood has shifted. The shares have climbed almost 12% in a month. So, have we finally reached the bottom of the glass?

I’d love to say this followed a stunning set of numbers. Sadly, it didn’t. Third-quarter sales (6 May) rose just 0.3% to $4.5bn. That beat expectations, but only narrowly, and mostly down to two one-off boosts. Easter arrived earlier this year and distributors stocked up ahead of the FIFA World Cup. New chief executive Sir Dave Lewis refused to upgrade full-year guidance.

The US remains the big concern because it accounts for around 40% of net sales. Higher oil prices won’t help either. They squeeze consumers and push up transport costs at the same time.

So why has sentiment improved? Trump removed US tariffs on Scotch whisky. Investors spotted signs of stabilisation in Africa and Latin America. Deutsche Bank upgraded the shares to Buy, arguing that excessive market pessimism had already been priced in.

Is Diageo finally worth considering again?

I’ve noticed consumer shares generally picking up as markets cling to hopes of some kind of resolution to the Iran crisis. Personally, I’m not banking on one any time soon. Yet, I have no plans to sell my Diageo shares. Consumer trends are cyclical. At some point, they’ll swing again.

This latest rally could easily fizzle out. Yet with Lewis running the show and the price-to-earnings ratio still a modest 13.2, I still think the recovery will eventually come. I think Diageo shares looks worth considering today, but I wouldn’t expect them to rocket. The road to recovery is likely to be bumpy, but I can feel it getting closer.

Should you invest £5,000 in Diageo Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Diageo Plc made the list?

Harvey Jones owns shares in Diageo. 

The post Up 12% in a month! Is the Diageo share price finally ready to rocket? appeared first on The Twelfth Magpie.

A key catalyst for this was the onset of a prolonged downturn in its North American business. That, combined with softer margins and a couple of strategy mis‑steps across the firm, has kept sentiment against the stock.

However, the business is now delivering pockets of sales growth. And it continues to generate strong cash flows from its global portfolio of brands.

So, is now the time to take advantage of its bargain-basement price and lock in a holding?

What does a deep dive into the business show?

A company’s long‑term valuation ultimately rests on the strength of its underlying business. A risk for Diageo is that North American sales weakness could drag on longer than expected as drinking declines in the younger generation.Another is that rising energy and distribution costs could keep squeezing profitability.

Its H1 2026 results showed little headline reason for bullishness. Net sales fell 4% year on year to $10.46bn (£7.79bn), while operating profit dropped 1.2% to $3.12bn.However, net profit did rise — by 1.7% to $2.11bn — and basic earnings per share increased 3% to 89.7c.

These numbers again highlighted the ongoing drag from North America and softer margins. But they also underlined the resilience of Diageo’s cash‑generative model, which remains a key driver of earnings stability ahead.

Q3 showed similar early signs of improvement. Reported net sales rose 2.3% to $4.48bn, with organic net sales edging up 0.3% as volumes grew 0.4%.

Europe, Latin America & Caribbean, and Africa all delivered high‑single‑digit organic growth. And inventory levels continued to normalise, hinting that underlying momentum may be starting to stabilise.

So what’s the true value of the shares now?

To estimate where a stock should trade, discounted cash flow (DCF) analysis projects future cash flows and discounts them back to today. The more uncertain those forecasts are, the higher the return investors demand, increasing the discount rate.

Analysts’ DCF valuations may vary because they use different assumptions. Using my own inputs — including a 7.4% discount rate — Diageo shares appear 47% undervalued at their present price of £15.76.

That places their ‘fair value’ at roughly £29.74, nearly twice the current level.

Historically, asset prices (including shares) tend to trend toward their fair value. So, if this continues to occur — and if my DCF modelling holds good — this could be an excellent potential buying opportunity.

My investment view

Diageo’s long‑term earnings power appears still to be intact. It is supported by a global portfolio of premium brands that continues to generate strong cash flows.

The latest H1 and Q3 numbers show early signs that sales momentum may be stabilising after a difficult period. North America is still a drag, but improving trends elsewhere suggest the worst of the downturn may be passing.

And with the shares trading far below their estimated fair value, much of the bad news already appears priced in. So for investors willing to look beyond short‑term volatility, this could be an attractive opportunity to consider locking into a high‑quality business at a rare discount.

My focus is on high-yield stocks, so this is not for me. But I have seen several high-returning stocks at deep discounts in recent days.

Should you invest £5,000 in Diageo Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Diageo Plc made the list?

Simon Watkins does not hold any positions in the companies mentioned.

The post Down 23% this year! But are Diageo shares set to soar on rising sales and cash flow momentum? appeared first on The Twelfth Magpie.

The premium spirit giant’s value has increased by just under 10% over this period. OK, so that sort of gain probably won’t see many champagne corks being popped. But it’s almost double the rise seen in the FTSE 100 index over the same period.

Put another way, a £10,000 stake will have already generated a tidy profit of around £1,000.

I don’t know about you, but that seems a pretty great return for doing little more than clicking the ‘buy’ button.

So, can Diageo shares keep rising?

As always, one can come up with reasons that support and oppose the idea that this form will continue.

Optimists will point to this month’s trading statement as evidence that former Tesco man and new CEO Dave Lewis is already having a positive impact.

Reported net sales were 2.3% higher in the firm’s third quarter. Guidance for the whole 2026 financial year was also reiterated. Sure, that’s hardly the sort of news to get the pulse racing. But it does suggest that things are starting to stabilise.

The number of short sellers circling the stock is relatively low, too. If these usually-very-well-informed traders aren’t confident enough to bet the share price will fall from here, that’s got to be encouraging, right?

No shortage of challenges

Well, it’s worth bearing in mind that even the most hated stocks can still see periods where the share price heads north, despite nothing massively changing. Sentiment about individual companies can often overshoot in either direction, thanks to short-term buyers and sellers (not Magpies) being driven by emotion. Perhaps Diageo’s recent rise is simply an indication that people are still pessimistic, just slightly less pessimistic than before?

There are certainly plenty of reasons for staying grounded. Indeed, the company said that it “remains mindful of continued geopolitical uncertainty“. North America — where market conditions were described as “soft” also remains its “biggest challenge” and things won’t be fixed overnight.

Now factor in the not-unsubstantial, longer-term challenges of weight-loss drugs and health-obsessed younger generations drinking less alcohol.

Let’s also not forget that stock markets can be cruel. Lewis and his team could do everything right from here and still see the company’s value dragged down along with everything else due to a macroeconomic shock.

Promising movement

As things stand, I see the recent positive momentum as something to toast. But I’m not quite ready to believe that we’ve seen an end to Diageo’s dark days just yet. With no more numbers expected until August’s full-year results, investors may look to move their money elsewhere. Sometimes, no news is as bad as, well, bad news.

Still, I’m definitely not looking to take the shares off my wishlist. Some seriously hot weather and major sporting events, such as the forthcoming World Cup, surely won’t do any harm to sales.

If the company can then show it has managed to deliver on its target of £300m in savings by the end of June (or possibly even more), I can see buyers piling in.

Should you invest £5,000 in Diageo Plc right now?

When investing expert Mark Rogers and his team have a stock tip, it can pay to listen. After all, the flagship Twelfth Magpie Share Advisor newsletter he has run for nearly a decade has provided thousands of paying members with top stock recommendations from the UK and US markets.

And right now, Mark thinks there are 6 standout stocks that investors should consider buying. Want to see if Diageo Plc made the list?

Paul Summers does not hold any positions in the companies mentioned.

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