Diageo PLC (LSE:DGE) full-year results later will be ‘a clearing event’, suggest the analysts at Citi.
On-going weak consumer off-take trends for spirits in North and destocking through January-June 2024, coupled with lacklustre trading in China, means the numbers won’t be pretty and more earnings downgrades are likely to follow.
While there is a risk of leakage into 2025/25 due to currency effects, Citi nonetheless believes tomorrow’s results will mark the bottoming of Diageo’s downgrade cycle.
As such, the print should allow investors to look forward and “revisit what we think remains a compelling medium-term compounding growth story and one with considerable re-rating potential”.
Shares were flat at 2,550p.