We’ve recently updated our valuation analysis.

Diageo Valuation

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

Valuation Score

0/6

Valuation Score 0/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

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

Other financial metrics that can be useful for relative valuation.

DGE 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/Revenue6.6x
Enterprise Value/EBITDA19.7x
PEG Ratio2.9x

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.
CompanyPEEstimated GrowthMarket Cap
Peer Average14x
BATS British American Tobacco
13.7x14.4%UK£73.8b
CCR C&C Group
12.2x11.0%UK£689.4m
IMB Imperial Brands
12.2x7.3%UK£19.2b
CCH Coca-Cola HBC
17.9x24.3%UK£7.2b
DGE Diageo
26.4x9.2%UK£85.8b

Price-To-Earnings vs Peers: DGE is expensive based on its Price-To-Earnings Ratio (26.4x) compared to the peer average (14x).


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
Industry Avg.n/a10.4%
n/an/an/a

Price-To-Earnings vs Industry: DGE is expensive based on its Price-To-Earnings Ratio (26.4x) compared to the European Beverage industry average (16.3x)


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 Ratio26.4x
Fair PE Ratio23.4x

Price-To-Earnings vs Fair Ratio: DGE is expensive based on its Price-To-Earnings Ratio (26.4x) compared to the estimated Fair Price-To-Earnings Ratio (23.4x).


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 (£37.76) is trading above our estimate of fair value (£35.6)

Significantly Below Fair Value: DGE is trading above our estimate of fair value.


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£37.76
UK£43.11
+14.2%
12.6%UK£54.30UK£30.00n/a24
Dec ’23UK£38.46
UK£43.15
+12.2%
12.7%UK£54.30UK£30.00n/a24
Nov ’23UK£36.11
UK£43.09
+19.3%
12.7%UK£54.30UK£30.00n/a24
Oct ’23UK£37.98
UK£42.73
+12.5%
13.2%UK£54.30UK£30.00n/a25
Sep ’23UK£37.34
UK£42.65
+14.2%
13.1%UK£54.30UK£30.00n/a25
Aug ’23UK£39.06
UK£42.19
+8.0%
13.1%UK£54.30UK£30.00n/a24
Jul ’23UK£35.08
UK£40.88
+16.6%
12.7%UK£50.40UK£28.00n/a23
Jun ’23UK£36.22
UK£41.83
+15.5%
11.6%UK£47.00UK£28.00n/a23
May ’23UK£40.19
UK£41.80
+4.0%
11.6%UK£47.00UK£28.00n/a23
Apr ’23UK£38.70
UK£41.41
+7.0%
11.6%UK£48.00UK£28.00n/a23
Mar ’23UK£36.59
UK£42.66
+16.6%
10.9%UK£49.00UK£31.00n/a22
Feb ’23UK£37.44
UK£42.78
+14.3%
10.7%UK£49.00UK£31.00n/a23
Jan ’23UK£40.36
UK£42.05
+4.2%
11.3%UK£48.00UK£29.00n/a23
Dec ’22UK£38.46
UK£41.85
+8.8%
11.4%UK£48.00UK£29.00UK£38.4623
Nov ’22UK£36.57
UK£38.51
+5.3%
11.1%UK£44.00UK£29.00UK£36.1123
Oct ’22UK£35.31
UK£38.09
+7.9%
10.5%UK£43.00UK£29.00UK£37.9823
Sep ’22UK£35.53
UK£37.21
+4.7%
12.1%UK£43.00UK£26.00UK£37.3424
Aug ’22UK£35.71
UK£36.90
+3.4%
12.4%UK£43.00UK£26.00UK£39.0624
Jul ’22UK£34.95
UK£36.10
+3.3%
13.0%UK£44.00UK£26.00UK£35.0824
Jun ’22UK£34.07
UK£35.01
+2.7%
12.9%UK£42.00UK£26.00UK£36.2224
May ’22UK£32.51
UK£33.10
+1.8%
13.5%UK£40.05UK£24.00UK£40.1922
Apr ’22UK£30.07
UK£32.67
+8.6%
13.0%UK£40.05UK£24.00UK£38.7023
Mar ’22UK£28.74
UK£32.79
+14.1%
12.9%UK£40.05UK£24.00UK£36.5926
Feb ’22UK£29.43
UK£32.69
+11.1%
13.5%UK£40.05UK£24.00UK£37.4426
Jan ’22UK£28.78
UK£31.82
+10.6%
13.1%UK£39.00UK£24.00UK£40.3626
Dec ’21UK£29.27
UK£30.96
+5.8%
14.2%UK£39.00UK£24.00UK£38.4626

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


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