Diageo plc

BATS-CHIXE:DGEL Stock Report

Market Cap: UK£52.5b

Diageo Valuation

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

Valuation Score

4/6

Valuation Score 4/6

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

Below Fair Value: DGEL (£23.52) is trading below our estimate of fair value (£37.32)

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

Key Valuation Metric

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

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

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

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for DGEL vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average14.4x
IMB Imperial Brands
9.6x0.8%UK£20.0b
CCH Coca-Cola HBC
19x11.9%UK£10.0b
ABF Associated British Foods
11.1x4.2%UK£16.1b
000858 Wuliangye YibinLtd
17.9x8.8%CN¥579.6b
DGEL Diageo
17.1x3.9%UK£52.5b

Price-To-Earnings vs Peers: DGEL is expensive based on its Price-To-Earnings Ratio (17.1x) compared to the peer average (14.4x).

Price to Earnings Ratio vs Industry

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

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
No. of Companies7PE01020304050+
0 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: DGEL 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 DGEL'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.

DGEL PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio17.1x
Fair PE Ratio20.7x

Price-To-Earnings vs Fair Ratio: DGEL is good value based on its Price-To-Earnings Ratio (17.1x) compared to the estimated Fair Price-To-Earnings Ratio (20.7x).

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 DGEL forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£23.52
UK£27.20
+15.7%
12.5%UK£33.90UK£20.86n/a22
Nov ’25UK£24.04
UK£26.92
+12.0%
13.0%UK£33.15UK£20.40n/a22
Oct ’25UK£26.11
UK£26.00
-0.4%
12.9%UK£31.96UK£19.67n/a22
Sep ’25UK£24.77
UK£26.10
+5.4%
14.1%UK£33.50UK£19.42n/a22
Aug ’25UK£23.99
UK£27.60
+15.1%
15.1%UK£34.73UK£20.13n/a22
Jul ’25UK£24.85
UK£29.50
+18.7%
11.6%UK£35.09UK£23.06n/a22
Jun ’25UK£26.37
UK£29.90
+13.4%
12.4%UK£35.67UK£23.23n/a22
May ’25UK£27.41
UK£30.45
+11.1%
12.4%UK£36.39UK£23.70n/a22
Apr ’25UK£29.31
UK£30.08
+2.6%
11.8%UK£35.48UK£23.83n/a22
Mar ’25UK£29.63
UK£30.82
+4.0%
13.1%UK£41.05UK£24.02n/a24
Feb ’25UK£28.94
UK£30.49
+5.4%
13.0%UK£40.65UK£23.65n/a24
Jan ’25UK£28.62
UK£32.09
+12.1%
13.6%UK£41.04UK£24.70n/a25
Dec ’24UK£28.12
UK£32.44
+15.4%
12.9%UK£40.78UK£24.49n/a25
Nov ’24UK£31.34
UK£37.08
+18.3%
12.1%UK£46.38UK£29.47UK£24.0425
Oct ’24UK£30.37
UK£37.54
+23.6%
11.7%UK£46.24UK£30.29UK£26.1124
Sep ’24UK£32.03
UK£37.58
+17.3%
10.0%UK£44.80UK£29.56UK£24.7724
Aug ’24UK£34.12
UK£37.40
+9.6%
11.3%UK£47.14UK£29.13UK£23.9923
Jul ’24UK£33.83
UK£37.86
+11.9%
11.7%UK£47.64UK£26.24UK£24.8523
Jun ’24UK£33.43
UK£39.43
+17.9%
12.5%UK£48.52UK£26.47UK£26.3723
May ’24UK£36.23
UK£39.75
+9.7%
12.4%UK£49.02UK£26.12UK£27.4123
Apr ’24UK£36.14
UK£40.02
+10.7%
12.8%UK£51.18UK£26.26UK£29.3123
Mar ’24UK£35.28
UK£41.07
+16.4%
12.8%UK£52.54UK£27.26UK£29.6325
Feb ’24UK£35.52
UK£40.19
+13.2%
13.2%UK£51.03UK£26.47UK£28.9425
Jan ’24UK£36.55
UK£42.33
+15.8%
13.0%UK£51.52UK£28.67UK£28.6225
Dec ’23UK£38.46
UK£40.59
+5.6%
12.9%UK£48.94UK£28.21UK£28.1225
Nov ’23UK£36.16
UK£42.56
+17.7%
12.9%UK£52.25UK£30.12UK£31.3425

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

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