Diageo plc

LSE:DGE Stock Report

Market Cap: UK£56.0b

Diageo Valuation

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

Below Fair Value: DGE (£25.19) is trading below our estimate of fair value (£36.46)

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

Key Valuation Metric

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

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

The above table shows the Price to Earnings ratio for DGE. This is calculated by dividing DGE's market cap by their current earnings.
What is DGE's PE Ratio?
PE Ratio18.4x
EarningsUS$3.87b
Market CapUS$71.04b

Price to Earnings Ratio vs Peers

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

The above table shows the PE ratio for DGE vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyForward PEEstimated GrowthMarket Cap
Peer Average13.7x
IMB Imperial Brands
8.1x-4.8%UK£21.2b
CCH Coca-Cola HBC
18.8x12.6%UK£9.8b
ABF Associated British Foods
10.5x5.8%UK£15.3b
000858 Wuliangye YibinLtd
17.4x8.8%CN¥563.6b
DGE Diageo
18.4x3.8%UK£56.0b

Price-To-Earnings vs Peers: DGE is expensive based on its Price-To-Earnings Ratio (18.4x) compared to the peer average (13.7x).

Price to Earnings Ratio vs Industry

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

0 CompaniesPrice / EarningsEstimated GrowthMarket Cap
DGE 18.4xIndustry Avg. 18.0xNo. of Companies8PE01020304050+
0 CompaniesEstimated GrowthMarket Cap
No more companies

Price-To-Earnings vs Industry: DGE is expensive based on its Price-To-Earnings Ratio (18.4x) compared to the European Beverage industry average (18x).

Price to Earnings Ratio vs Fair Ratio

What is DGE'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.

DGE PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio18.4x
Fair PE Ratio20.8x

Price-To-Earnings vs Fair Ratio: DGE is good value based on its Price-To-Earnings Ratio (18.4x) compared to the estimated Fair Price-To-Earnings Ratio (20.8x).

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 DGE forecast and predictions for the stock price in 12 month’s time.
DateShare PriceAverage 1Y Price TargetDispersionHighLow1Y Actual priceAnalysts
CurrentUK£25.19
UK£27.01
+7.2%
11.4%UK£30.93UK£19.69n/a22
Dec ’25UK£23.53
UK£26.43
+12.4%
11.4%UK£30.74UK£20.51n/a22
Nov ’25UK£23.96
UK£26.92
+12.4%
13.1%UK£33.29UK£20.28n/a22
Oct ’25UK£26.16
UK£26.00
-0.6%
13.0%UK£32.10UK£19.55n/a22
Sep ’25UK£24.73
UK£26.10
+5.6%
14.1%UK£33.50UK£19.42n/a22
Aug ’25UK£24.00
UK£27.61
+15.0%
15.1%UK£34.73UK£20.13n/a22
Jul ’25UK£24.80
UK£29.50
+19.0%
11.6%UK£35.09UK£23.06n/a22
Jun ’25UK£26.31
UK£29.90
+13.7%
12.4%UK£35.67UK£23.23n/a22
May ’25UK£27.43
UK£30.45
+11.0%
12.4%UK£36.39UK£23.70n/a22
Apr ’25UK£29.26
UK£30.08
+2.8%
11.8%UK£35.48UK£23.83n/a22
Mar ’25UK£29.64
UK£30.82
+4.0%
13.1%UK£41.05UK£24.02n/a24
Feb ’25UK£29.05
UK£30.49
+5.0%
13.0%UK£40.65UK£23.65n/a24
Jan ’25UK£28.56
UK£32.09
+12.4%
13.6%UK£41.04UK£24.70n/a25
Dec ’24UK£28.16
UK£32.44
+15.2%
12.9%UK£40.78UK£24.49UK£23.5325
Nov ’24UK£31.37
UK£37.08
+18.2%
12.1%UK£46.38UK£29.47UK£23.9625
Oct ’24UK£30.34
UK£37.54
+23.7%
11.7%UK£46.24UK£30.29UK£26.1624
Sep ’24UK£32.00
UK£37.58
+17.5%
10.0%UK£44.80UK£29.56UK£24.7324
Aug ’24UK£34.08
UK£37.40
+9.8%
11.3%UK£47.14UK£29.13UK£24.0023
Jul ’24UK£33.79
UK£37.86
+12.0%
11.7%UK£47.64UK£26.24UK£24.8023
Jun ’24UK£33.45
UK£39.43
+17.9%
12.5%UK£48.52UK£26.47UK£26.3123
May ’24UK£36.22
UK£39.75
+9.7%
12.4%UK£49.02UK£26.12UK£27.4323
Apr ’24UK£36.14
UK£40.02
+10.7%
12.8%UK£51.18UK£26.26UK£29.2623
Mar ’24UK£35.21
UK£41.07
+16.7%
12.8%UK£52.54UK£27.26UK£29.6425
Feb ’24UK£35.46
UK£40.19
+13.4%
13.2%UK£51.03UK£26.47UK£29.0525
Jan ’24UK£36.50
UK£42.33
+16.0%
13.0%UK£51.52UK£28.67UK£28.5625
Dec ’23UK£38.46
UK£40.59
+5.5%
12.9%UK£48.94UK£28.21UK£28.1625

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

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Company Analysis and Financial Data Status

DataLast Updated (UTC time)
Company Analysis2024/12/18 01:08
End of Day Share Price 2024/12/18 00:00
Earnings2024/06/30
Annual Earnings2024/06/30

Data Sources

The data used in our company analysis is from S&P Global Market Intelligence LLC. The following data is used in our analysis model to generate this report. Data is normalised which can introduce a delay from the source being available.

PackageDataTimeframeExample US Source *
Company Financials10 years
  • Income statement
  • Cash flow statement
  • Balance sheet
Analyst Consensus Estimates+3 years
  • Forecast financials
  • Analyst price targets
Market Prices30 years
  • Stock prices
  • Dividends, Splits and Actions
Ownership10 years
  • Top shareholders
  • Insider trading
Management10 years
  • Leadership team
  • Board of directors
Key Developments10 years
  • Company announcements

* example for US securities, for non-US equivalent regulatory forms and sources are used.

Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.

Analysis Model and Snowflake

Details of the analysis model used to generate this report is available on our Github page, we also have guides on how to use our reports and tutorials on Youtube.

Learn about the world class team who designed and built the Simply Wall St analysis model.

Industry and Sector Metrics

Our industry and section metrics are calculated every 6 hours by Simply Wall St, details of our process are available on .

Analyst Sources

Diageo plc is covered by 70 analysts. 16 of those analysts submitted the estimates of revenue or earnings used as inputs to our report. Analysts submissions are updated throughout the day.

AnalystInstitution
Anna ZyniewiczAlphaValue
John StaszakArgus Research Company
Barry CoppelBanco Santander