Jefferies has thrown its weight behind Diageo's plan to fix its ailing US business, telling clients the shares could climb 35% as the turnaround takes hold.
The investment bank kept its buy rating on Diageo, the FTSE 100 drinks giant behind Johnnie Walker, Guinness and Smirnoff, with a price target of 2,200p against a current 1,626p.
It also nudged up its target on the New York-listed shares to $117, from $108.
The US matters more than any other market to the story, accounting for about 40% of sales but, as Jefferies put it, 90% of the conversation.
What the analysts like is that the recovery plan does not bank on a bounce in the American spirits market.
Diageo's own forecasts assume the US stays weak, with the market shrinking around 3% this financial year before slowly bottoming out towards the end of the decade.
Those projections sit below outside data providers, which Jefferies reads as reassurance that the strategy is not built on a "hope trade" of cyclical recovery.
Instead, the plan is about execution: dragging the business from losing market share to holding it, and eventually gaining.
That is no small task, with roughly 65% of the US portfolio currently losing ground.
Jefferies points to four root causes, from long declines at core brands such as Crown Royal, Smirnoff and Captain Morgan to an over-reliance on premium tequila and too little presence in ready-to-drink cans.
Winning back tequila, where Don Julio and Casamigos have stumbled, is flagged as one of the biggest battlegrounds.
The broker argues the shares look cheap at around 14 times forecast earnings, against 17 times for the wider staples sector, leaving room to re-rate as cash returns come into view.
The next test comes on 5 November, when Diageo reports first-quarter trading alongside its annual meeting.
