Diageo Valuation

Is DEO undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

3/6

Valuation Score 3/6

  • Below Fair Value

  • Significantly Below Fair Value

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Analyst Forecast

Share Price vs Fair Value

What is the Fair Price of DEO when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: DEO (ARS22425) is trading below our estimate of fair value (ARS25766.27)

Significantly Below Fair Value: DEO is trading below fair value, but not by a significant amount.


Key Valuation Metric

Which metric is best to use when looking at relative valuation for DEO?

Key metric: As DEO is profitable we use its Price-To-Earnings Ratio for relative valuation analysis.

The above table shows the Price to Earnings ratio for DEO. This is calculated by dividing DEO's market cap by their current earnings.
What is DEO's PE Ratio?
PE Ratio17x
EarningsUS$3.87b
Market CapUS$65.68b

Price to Earnings Ratio vs Peers

How does DEO's PE Ratio compare to its peers?

The above table shows the PE ratio for DEO vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average33x
000858 Wuliangye YibinLtd
17.9x8.8%CN¥579.6b
STZ Constellation Brands
74.6x31.8%US$43.1b
RI Pernod Ricard
18.6x9.3%€27.5b
600809 Shanxi Xinghuacun Fen Wine FactoryLtd
21x12.3%CN¥259.8b
DEO Diageo
17x3.9%AR$52.1b

Price-To-Earnings vs Peers: DEO is good value based on its Price-To-Earnings Ratio (17x) compared to the peer average (33.1x).


Price to Earnings Ratio vs Industry

How does DEO's PE Ratio compare vs other companies in the Global Beverage Industry?

1 CompanyPrice / EarningsEstimated GrowthMarket Cap
DEO 17.0xIndustry Avg. 18.2xNo. of Companies32PE01224364860+
1 CompanyEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: DEO is good value based on its Price-To-Earnings Ratio (17x) compared to the Global Beverage industry average (18.2x).


Price to Earnings Ratio vs Fair Ratio

What is DEO's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

DEO PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio17x
Fair PE Ration/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate DEO's Price-To-Earnings Fair Ratio for valuation analysis.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.


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