London, Jan 22, 2026, 09:33 GMT — Regular session
Diageo shares climbed roughly 0.5% to about 1,681 pence in early London trading Thursday, continuing a bounce that pushed the stock up 2.6% the previous day. Despite this, the world’s biggest spirits producer remains down around 31% over the last year, making it vulnerable to any signs of stabilizing demand. 1
This shift is significant as investors seek stability before the upcoming earnings reports — not lofty forecasts, but signs that declines in major markets are slowing. Several analyst notes this week have also highlighted how much negative news might already be baked into prices.
Diageo released an “aide memoire” on Wednesday ahead of its interim results, reaffirming its fiscal 2026 outlook without offering fresh guidance or commentary on current trading. The company expects organic net sales — which exclude currency effects and acquisitions — to remain flat or dip slightly. Organic operating profit is forecast to grow in the low-to-mid single digits, supported by cost savings from its “Accelerate” programme, alongside roughly $3 billion in free cash flow for the year. 2
Analyst calls remained mostly positive. Barclays’ Laurence Whyatt stuck with a Buy rating and held the target price steady at 2,550 pence. Jefferies’ Edward Mundy also maintained a Buy rating, setting a 2,000 pence target—both comfortably above the current share price, according to MarketScreener summaries. 3
Positive signals from India lifted sentiment around the group’s emerging-market holdings. Diageo-controlled United Spirits posted a 12% jump in quarterly profit, Reuters said, driven by steady demand for premium liquor. Its “prestige & above” category expanded 8.2%, while the more affordable “popular” segment saw a decline. 4
On a separate earnings call, Diageo India’s managing director Praveen Someshwar told analysts he’s spotting “consumption green shoots,” though he warned policy hurdles remain in major states like Maharashtra and Telangana, according to The Economic Times. 5
London investors now face a key question: can premium strength counterbalance weaker volume in the more price-sensitive segments? Revenue can hold steady on price and mix, even if fewer bottles sell. But that won’t last if discounting makes a comeback.
The trade isn’t one-sided. If U.S. spirits demand slips further or China hits a rough patch, volumes could take a hit. That would push Diageo to lean on promotions, squeezing margins just as it aims to meet its cost and cash goals.
Traders keep an eye on how fast the company converts inventory into cash, trying not to rely too much on discounts. This balance first affects working capital and then, more subtly, free cash flow.
Diageo’s interim results for the six months ending Dec. 31 are set for Feb. 25. Investors will be looking closely for updates on demand trends and whether the firm remains on course with its fiscal-year cash flow and profit targets. 6
