Diageo: Shares in FTSE 100 Guinness, Baileys and Johnnie Walker owner are staging a comeback

Shares in Diageo, the giant behind Guinness, Baileys and Johnnie Walker, are staging a comeback after falling to a historic low last month.

The London-headquartered group, which also has a listing on the New York Stock Exchange, has seen its share rise to 2,581p in early trading today, up 3.6 per cent.

The latest price is a spike from the 2,341p Diageo’s shares were trading at on 4 December and the historic low of 2,306p on 6 November.

However, despite the recent rise, shares in Diageo are down from the 2,819p they were priced at on 2 January and the 3,027p at their highest point in 2024.

The recent surge in Diageo’s share price comes after the FTSE 100 member was upgraded two levels by analysts at UBS in a note published on Wednesday, 11 December.

In the note, UBS analysts said Diageo’s US business is gathering momentum after overcoming the impact of a post-pandemic shift away from more expensive spirits drinking at home.

Shares in Diageo’s US listing on the New York Stock Exchange have risen by almost five per cent in premarket trading to $131.5, having closed yesterday at $126.7.

As a result of the recent momentum, UBS has changed its rating for Diageo from sell to buy.

The move comes after US group Jefferies also upgraded Diageo to a buy rating earlier this month.

Diageo: ‘Global environment remains challenging’

In a statement issued to the London Stock Exchange ahead of its annual general meeting in September, Diageo chief executive Debra Crew said: “Our expectations are unchanged from when we reported our fiscal 24 preliminary results on 30 July, 2024.

“The global environment remains challenging for both our industry and Diageo.

“While consumers continue to be cautious in this environment, we are focused on strengthening the resilience of our business through operational excellence, productivity and strategic investments to win quality market share.

“We have made good progress on our strategic initiatives, including our US route-to-market enhancements, and in Nigeria we are progressing well towards completion of the agreement to restructure our business model there. 

“I believe that the fundamentals for global TBA, and particularly the spirits industry, remain strong and am confident that when the consumer environment improves, growth will return and the actions we are taking will position us well to outperform the market.”

For its latest financial year, Diageo reported a profit of $304m (£237m), a fall of 4.8 per cent, while its sales declined for the first time since the Covid-19 pandemic.