After a tough 2024 things should start to look up for the alcoholic beverages sector in 2025, Deutsche Bank believes but not for Diageo PLC (LSE:DGE), which remains firmly on its 'sell' list.
The German bank called the problems facing the Guinness, Johnnie Walker and Smirnoff group well ahead of the pack earlier this year and it stays on the 'least preferred list' heading into the New Year.
Overall, Deutsche Bank says it remains cautious on spirits, has become more selective within beer and continues to like soft drinks.
Carlsberg and Coca-Cola bottlers Hellenic and EuroPacfic are its top picks with Diageo and Remy in the doghouse.
Spirits demand in China is a worry with the potential for import tariffs a “direct downside risk” while a “trend towards temperance” might be a headwind to volume growth for Spirits and Beer alike while Soft Drinks are "clearly more insulated".
“In addition, trade up appears to be on pause with trade down evident in US Spirits,” the bank said.
Deutsche Bank trimmed its share price target for Diageo slightly to 1,970p from 2,000p.
Shares today were down 0.6% at 2,337p.