Independent equity research
Is Diageo (DGE) a Buy, Hold or Sell?
Diageo — our independent, AI-built valuation and rating, in brief.
HOLD (reduce into strength)
12-mo fair value
1,515 p
To fair value
−5%
By · report dated 2026-09-05 · fair value derived independently of the market price.
The thesis, in brief
Diageo's FY26 free cash flow was bought with a $368m capex cut and a stalled maturing-stock build, so the CMD's $8bn three-year pledge rests on savings the CEO has said must be reinvested in North American price; if NA organic sales are still negative at the FY27 interims, the plan slips a year
How we value it
We value Diageo using 70% probability-weighted FCFF/DCF (USD, WACC 8.02%) + 30% FY27E EV/EBITDA at 11.26x peer median; USD->GBP->GBX. The 12-month fair value is set from that intrinsic estimate first, then compared to the market to read the upside or downside — never anchored to the current price.
What the full report covers
- Business & moat + industry cycle
- Earnings quality & normalized EPS
- Returns on capital (ROIC vs WACC)
- Balance-sheet safety
- Two independent valuations (DCF + multiples)
- Bear / base / bull fair values
- Earnings-call analysis
- Insider activity & positioning
- Technicals (RSI / ADX)
- A falsifiable thesis
Read the full Diageo report
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