Barclays has reiterated its confidence in the drinks maker Diageo PLC (LSE:DGE), known for brands like Johnnie Walker, Guinness, and Smirnoff.
The bank maintains its 'overweight' recommendation, suggesting that Diageo's stock may outperform the market. The bank has also stuck to its £47.20 target for the share price.
While many in the market are predicting a drop in Diageo's US shipments, Barclays has a more optimistic outlook. The bank sees more potential for positive surprises than negative ones and applauds Diageo's wide geographical spread as an asset.
Diageo's 2023 prelims are scheduled to be announced on August 1.
While the focus of investors will likely be on the US market, Barclays expects Diageo's performance in other regions, such as Europe, Latin America and the Caribbean (LAC), Asia, and Africa, to highlight the advantages of its international footprint.
For the fiscal year 2023, Barclays anticipates an increase of 7% in organic sales growth (OSG) and 7.3% in organic profit growth (OPG).
Despite Diageo's missed forecast in the US market for the first half of 2023, Barclays remains positive about the company's prospects. It is closely watching the sales trends as the demand for spirits in the US returns to normal.
In late morning trade, the shares were down 0.7% at £33.53.