Diageo plc stock is firmly in the spotlight on 17 December 2025, after the Johnnie Walker and Guinness owner announced a major East Africa transaction that brings in fresh cash, reduces leverage, and reshapes how the group operates in the region.
In a market that has been punishing global spirits makers for slowing demand (especially in the US and parts of Asia), Diageo’s decision to sell its controlling stake in East African Breweries (EABL) to Asahi is being read as more than a simple portfolio tweak. It’s a balance-sheet move, a “simplify the footprint” move, and—depending on your level of optimism—a sign that Diageo is serious about executing on the deleveraging and disposal strategy it’s been talking about all year.
Below is what’s new today, what analysts are forecasting, and what the latest market commentary implies for Diageo shares (LSE: DGE / NYSE: DEO).
What’s driving Diageo stock on 17 December 2025
Diageo agrees to sell EABL stake to Asahi — key terms
Diageo said it has agreed to sell its interest in East African Breweries plc (EABL) to Japan’s Asahi Group Holdings via the sale of 100% of Diageo Kenya Limited, which holds 65% of EABL. The transaction also includes Diageo’s 53.68% stake in UDVK, a Kenyan spirits producer and importer. [1]
Deal highlights (as stated by Diageo):
- Estimated net proceeds:$2.3 billion, after tax and transaction costs [2]
- Valuation multiple:~17x adjusted EBITDA [3]
- Implied enterprise value for 100% of EABL:$4.8 billion [4]
- Balance sheet impact: expected to reduce leverage by ~0.25x [5]
- Timing: completion expected in H2 2026, subject to regulatory approvals [6]
This is not Diageo “leaving” East Africa in the way a headline reader might assume. The company said it will enter long-term licensing agreements with EABL to secure ongoing production and distribution of Guinness, select local spirits and ready-to-drink brands, and distribution of Diageo’s international spirits portfolio in the region. [7]
That detail matters: Diageo is selling ownership and consolidation, but trying to keep brand economics and route-to-market relevance.
EABL’s scale (and why the buyer cares)
Diageo’s announcement also included financial detail for EABL: for the fiscal year ended 30 June 2025, EABL reported:
- Net sales:$996m
- EBITDA:$258m
- Net income:$94m
- Net debt:$229m [8]
Asahi described the acquisition as a large strategic push into Africa, while noting it expects EABL to remain listed on regional exchanges after completion. [9]
Diageo share price check: where DGE stock is trading today
For investors tracking Diageo stock in London, Investing.com’s live market page shows Diageo (DGE) trading around 1,684.5 on 17 December 2025, versus a previous close of 1,682.5, with the session range and 52-week range also spelled out. [10]
That price level is psychologically important because it anchors most of the “upside/downside” math used in analyst target price summaries and helps explain why every incremental bit of “balance-sheet repair” news is getting attention.
Recent market commentary has also emphasized how far the stock remains from prior highs. For example, MarketWatch noted that on 16 December 2025 Diageo shares closed at £16.83, still 34.84% below a prior 52-week high, on lighter-than-average volume. [11]
Why the Asahi / EABL sale matters for Diageo investors
1) It directly supports deleveraging — a core investor concern
Diageo is effectively telling the market: we heard you on leverage. In the EABL announcement, the company explicitly linked the disposal to “strengthen our balance sheet” and move leverage back toward its target range. [12]
This lines up with Diageo’s own prior guidance. In its Fiscal 26 Q1 trading statement (6 November 2025), Diageo reiterated it aims to return to “well within” its target leverage ratio range of 2.5x–3.0x no later than fiscal 28, supported in part by “appropriate and selective disposals.” [13]
Today’s transaction is exactly the kind of disposal that statement foreshadowed.
2) It’s a shift toward “asset-light” exposure in a growth region
East Africa has been a strong growth narrative at various points—yet owning and consolidating local operations also ties up capital and adds country-specific risk.
By choosing licensing agreements plus distribution relationships, Diageo is attempting to keep brand presence (Guinness and key spirits) while freeing capital and simplifying execution. [14]
This is the corporate equivalent of switching from “own the house” to “own the best room in the house and collect rent,” except the rent is brand licensing and distribution economics.
3) The timing intersects with CEO transition and strategy reset
Diageo’s leadership story has been part of the stock narrative in 2025. Reuters reported in November that Diageo appointed former Tesco chief executive Dave Lewis as CEO, tasking him with reviving growth during a period marked by debt concerns, potential tariff impacts, and shifting consumer behavior. [15]
That matters because disposals, leverage, and portfolio shape are typically CEO-level calls. Investors tend to ask:
- Is this transaction a “one-off,” or the first of several?
- Will proceeds go to debt reduction, buybacks, reinvestment—or a mix?
- Does the new CEO accelerate restructuring further?
Diageo is already messaging that disposals are part of a broader plan, not an isolated event. [16]
Analyst forecasts for Diageo stock: targets, ratings, and what’s changed
Current consensus targets in London
Investing.com’s Diageo page (as of 17 December 2025) summarizes analyst targets and recommendations, reporting:
- Average 12‑month price target: ~GBP 2088.17
- High estimate: ~GBP 2655.69
- Low estimate: ~GBP 1568.09
- Ratings mix:12 “buy” vs 2 “sell,” with an overall “Buy” rating and ~24% upside potential (as displayed on that page). [17]
TipRanks, another widely used aggregator of analyst estimates, places the average 12‑month target around 2,156.51p, with a high near 2,714.76p and a low around 1,603.72p, and characterizes the consensus as “Moderate Buy.” [18]
These two snapshots broadly tell the same story: analysts see meaningful upside from current prices—but disagreement remains wide, and the low-end targets sit uncomfortably close to where the stock has been trading.
Recent downgrade pressure: UBS turns more cautious
Not all the analyst news flow is upbeat. UBS downgraded Diageo to Neutral from Buy and cut its price target to £18.50 from £22.50, citing concerns around the US spirits market and highlighting the company’s 2025 underperformance. [19]
Interactive Investor’s commentary on the downgrade added a useful valuation framing: it noted Diageo’s shares had fallen sharply during 2025 and were trading at a discount to staples peers, while quoting UBS as expecting the discount to persist until US spirits recover or restructuring becomes clearer. [20]
US-listed ADR targets: what Wall Street is implying for DEO
For US investors following Diageo’s ADR (NYSE: DEO), a Nasdaq-hosted analyst roundup (via Fintel data cited in the piece) reported an average one‑year price target around $122.45, with forecasts ranging from $90.85 to $150.00 (as of the report’s referenced date). [21]
The key takeaway is not the precise number—it’s that the street is still modeling a recovery scenario, even if the path is bumpy and time-consuming.
“Forecasts” that actually matter: Diageo’s own outlook for fiscal 2026
Analyst targets are opinions; company guidance is the operating reality everyone has to model.
In its Fiscal 26 Q1 trading statement, Diageo guided:
- Organic net sales growth: expected to be flat to slightly down for fiscal 2026
- Organic operating profit growth:low to mid-single digit, supported by cost savings
- Cost savings (Accelerate programme): ~$625m over three years “on track”
- Free cash flow: committed to ~$3bn in fiscal 2026 [22]
It also described what was weighing on performance: weakness in Chinese white spirits and a softer US consumer environment than planned. [23]
That backdrop explains why a $2.3bn net proceeds disposal can move sentiment: it doesn’t instantly fix demand, but it can make the balance sheet and flexibility story less grim.
Today’s investor debate: bull case vs bear case for Diageo stock
Because “analysis” is part of today’s news ecosystem, it’s worth summarizing the competing narratives currently circulating among market commentators.
The bullish framing (recovery + cash flow + valuation)
One bullish Seeking Alpha analysis published today argues Diageo is “built for premiumization,” highlights the new CEO’s turnaround reputation, and points to cash generation and cost actions as a path back to recovery. [24]
This view tends to treat the current price as already reflecting a lot of bad news—so any improvement in US demand, normalization in China, or credible portfolio simplification could re-rate the stock.
The cautious framing (headwinds + leverage + patience required)
A more cautious Seeking Alpha piece published today frames Diageo as a defensive quality business but emphasizes that investors may need patience given revenue weakness and the balance-sheet overhang, rating it more of a “Hold” style situation. [25]
This camp usually focuses on what has to go right (and for how long) before the market stops discounting the stock.
Neither viewpoint is gospel. But together they map the “mental battlefield” around Diageo shares: quality franchise vs near-term headwinds.
What to watch next for Diageo shares
1) Regulatory approvals and deal timeline
The EABL/Asahi deal is expected to complete in the second half of 2026, subject to approvals. [26]
That’s not tomorrow morning. Investors will likely track milestones and any commentary around conditions, timing risk, and transition arrangements.
2) How Diageo deploys the $2.3bn in proceeds
Diageo has already stated the deal should reduce leverage by ~0.25x. [27]
The market will look for clarity on:
- pace of debt reduction,
- whether additional disposals follow,
- and whether shareholder returns shift once leverage improves.
3) CEO transition and strategic direction
Reuters reported Dave Lewis is set to join in January after being appointed CEO in November. [28]
Major portfolio choices often accelerate (or change shape) once a permanent CEO starts setting “their” strategy.
4) Next major reporting date
Diageo’s investor calendar lists interim results for the six months ending 31 December 2025 scheduled for 25 February 2026. [29]
That’s a key checkpoint for whether the “flat to slightly down” fiscal 2026 narrative is holding—or worsening.
Bottom line: Diageo stock has a new catalyst, but the core questions remain
On 17 December 2025, Diageo has delivered a headline investors can measure: $2.3bn of expected net proceeds, a clearer path to deleveraging, and a strategic pivot that keeps brands in-market while reducing capital intensity. [30]
The market’s next move will hinge on whether this disposal is the start of a coherent multi-step reset—especially as Diageo navigates US demand softness, China-related headwinds, and an ongoing leadership transition. [31]
References
1. www.accessnewswire.com, 2. www.accessnewswire.com, 3. www.accessnewswire.com, 4. www.accessnewswire.com, 5. www.accessnewswire.com, 6. www.accessnewswire.com, 7. www.accessnewswire.com, 8. www.accessnewswire.com, 9. www.accessnewswire.com, 10. www.investing.com, 11. www.marketwatch.com, 12. www.accessnewswire.com, 13. www.diageo.com, 14. www.accessnewswire.com, 15. www.reuters.com, 16. www.accessnewswire.com, 17. www.investing.com, 18. www.tipranks.com, 19. www.investing.com, 20. www.ii.co.uk, 21. www.nasdaq.com, 22. www.diageo.com, 23. www.diageo.com, 24. seekingalpha.com, 25. seekingalpha.com, 26. www.accessnewswire.com, 27. www.accessnewswire.com, 28. www.reuters.com, 29. www.diageo.com, 30. www.accessnewswire.com, 31. www.diageo.com
