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Diageo Valuation

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

Valuation Score

2/6

Valuation Score 2/6

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

Below Fair Value: DGEP (€41.22) is trading below our estimate of fair value (€54.9)

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

Key Valuation Metric

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

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

The above table shows the Price to Earnings ratio for DGEP. This is calculated by dividing DGEP's market cap by their current earnings.
What is DGEP's PE Ratio?
PE Ratio	21.2x
Earnings	UK£3.58b
Market Cap	UK£75.75b

DGEP key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue	5.5x
Enterprise Value/EBITDA	16.3x
PEG Ratio	4x

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for DGEP vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
Company	Forward PE	Estimated Growth	Market Cap
Peer Average	14.4x
CCH Coca-Cola HBC	19x	11.9%	UK£10.0b
ABF Associated British Foods	11.1x	4.2%	UK£16.1b
IMB Imperial Brands	9.6x	0.8%	UK£20.0b
000858 Wuliangye YibinLtd	17.9x	8.8%	CN¥579.6b
DGEP Diageo	21.2x	5.3%	€75.8b

Price-To-Earnings vs Peers: DGEP is expensive based on its Price-To-Earnings Ratio (21.2x) compared to the peer average (16.5x).

Price to Earnings Ratio vs Industry

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

0 Companies	Price / Earnings	Estimated Growth	Market Cap

0 Companies		Estimated Growth	Market Cap

No more companies

Price-To-Earnings vs Industry: DGEP is expensive based on its Price-To-Earnings Ratio (21.2x) compared to the European Beverage industry average (17.8x).

Price to Earnings Ratio vs Fair Ratio

What is DGEP'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.

DGEP PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio	21.2x
Fair PE Ratio	n/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate DGEP'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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