Diageo Valuation

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

Valuation Score

5/6

Valuation Score 5/6

  • 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 GUI when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: GUI (€28.12) is trading below our estimate of fair value (€47.4)

Significantly Below Fair Value: GUI is trading below fair value by more than 20%.


Key Valuation Metric

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

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

The above table shows the Price to Earnings ratio for GUI. This is calculated by dividing GUI's market cap by their current earnings.
What is GUI's PE Ratio?
PE Ratio17.1x
EarningsUS$3.87b
Market CapUS$66.13b

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for GUI vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average31.8x
SWA Schloss Wachenheim
16.2x17.7%€118.8m
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
GUI Diageo
17.1x3.9%€52.5b

Price-To-Earnings vs Peers: GUI is good value based on its Price-To-Earnings Ratio (17.1x) compared to the peer average (31.8x).


Price to Earnings Ratio vs Industry

How does GUI's PE Ratio compare vs other companies in the European Beverage Industry?

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
GUI 17.1xIndustry Avg. 17.4xNo. of Companies7PE01020304050+
0 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: GUI is good value based on its Price-To-Earnings Ratio (17.1x) compared to the European Beverage industry average (17.4x).


Price to Earnings Ratio vs Fair Ratio

What is GUI'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.

GUI PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio17.1x
Fair PE Ratio22.9x

Price-To-Earnings vs Fair Ratio: GUI is good value based on its Price-To-Earnings Ratio (17.1x) compared to the estimated Fair Price-To-Earnings Ratio (22.9x).


Analyst Price Targets

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

The above table shows the analyst GUI forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
Current€28.12
€32.58
+15.9%
12.5%€40.59€24.98n/a22
Nov ’25€28.88
€31.90
+10.5%
13.0%€39.29€24.18n/a22
Oct ’25€31.70
€31.22
-1.5%
12.9%€38.38€23.62n/a22
Sep ’25€29.73
€30.80
+3.6%
14.1%€39.54€22.92n/a22
Aug ’25€28.59
€32.60
+14.0%
15.1%€41.01€23.78n/a22
Jul ’25€29.31
€34.93
+19.2%
11.6%€41.55€27.31n/a22
Jun ’25€31.27
€35.13
+12.3%
12.4%€41.90€27.29n/a22
May ’25€32.83
€35.59
+8.4%
12.4%€42.52€27.69n/a22
Apr ’25€33.92
€35.22
+3.8%
11.8%€41.54€27.91n/a22
Mar ’25€34.84
€35.99
+3.3%
13.1%€47.94€28.05n/a24
Feb ’25€33.82
€35.76
+5.7%
13.0%€47.68€27.73n/a24
Jan ’25€33.08
€37.05
+12.0%
13.6%€47.38€28.51n/a25
Dec ’24€32.96
€37.91
+15.0%
12.9%€47.65€28.62n/a25
Nov ’24€36.06
€42.58
+18.1%
12.1%€53.25€33.84€28.8825
Oct ’24€35.90
€43.36
+20.8%
11.7%€53.40€34.99€31.7024
Sep ’24€37.82
€43.80
+15.8%
10.0%€52.21€34.44€29.7324
Aug ’24€40.06
€43.51
+8.6%
11.3%€54.84€33.88€28.5923
Jul ’24€39.68
€43.84
+10.5%
11.7%€55.18€30.39€29.3123
Jun ’24€39.68
€45.91
+15.7%
12.5%€56.51€30.83€31.2723
May ’24€41.60
€44.94
+8.0%
12.4%€55.43€29.53€32.8323
Apr ’24€41.40
€45.52
+10.0%
12.8%€58.21€29.87€33.9223
Mar ’24€40.60
€46.29
+14.0%
12.8%€59.22€30.73€34.8425
Feb ’24€40.80
€45.28
+11.0%
13.2%€57.48€29.82€33.8225
Jan ’24€41.60
€48.03
+15.5%
13.0%€58.46€32.54€33.0825
Dec ’23€45.20
€47.21
+4.4%
12.9%€56.92€32.82€32.9625
Nov ’23€43.00
€49.40
+14.9%
12.9%€60.65€34.96€36.0625

Analyst Forecast: Target price is less than 20% higher than the current share price.


Discover undervalued companies