No recommendation
No news or research item is a personal recommendation to deal. Hargreaves Lansdown may not share ShareCast's (powered by Digital Look) views.
(Sharecast News) - Diageo fizzed higher on Thursday as UBS upgraded the shares to 'buy' from 'sell and hiked the price target to 2,920p from 2,300p, saying it sees upside risks to the US business.
"Our analysis shows its sell-out trends are running +3.6%, significantly outperforming a still weak Spirits industry, and the strong growth momentum behind key brands Don Julio and Crown Royal can be sustained," UBS said.
"Following -31% earnings per share downgrades over the past two years, we think investors can gain comfort the business is towards the end of its earnings downgrade cycle."
UBS said its expects some destocking to persist, driving H1 US Spirits shipments flattish. However, with strong growth of Guinness in the on-trade channel, the bank forecasts H1 North America organic sales up 0.6% versus consensus expectations for a 2.4% decline.
"There could be some upside risk to our North America forecasts if sell-out trends remain robust into December," it added.
At 1000 GMT, the shares were up 3.8% at 2,583p.
The value of investments can go down in value as well as up, so you could get back less than you invest. It is therefore important that you understand the risks and commitments. This website is not personal advice based on your circumstances. So you can make informed decisions for yourself we aim to provide you with the best information, best service and best prices. If you are unsure about the suitability of an investment please contact us for advice.
