- We review our Diageo investment case 4 months since our last update, and with key developments on currency, peers’ trading and COVID-19.
- While the pound has appreciated more than 5% against the dollar since September, we expect this to have limited impact on Diageo's earnings.
- Q3 CY20 updates from Diageo's peers in spirits and beer showed how trading stabilized, even with only partial re-openings globally.
- Despite COVID’s resurgence in Q4, vaccines mean the end of the outbreak is now in sight, and we expect Diageo's EPS to recover by FY22.
- At 2,896p, shares are expected to deliver a 35% total return (8.5% annualized) by June 2024, including a 2.4% Dividend Yield. Buy.
For further details see:
Diageo: Good Dividend And Growth, Despite U.K. Pound's Rise