Two of the City’s big hitters are going head to head again over the prospects for Guinness and spirits giant Diageo PLC (LSE:DGE)ahead of its interim results on 4 February.
Deutsche Bank has an impressive record in calling the problems facing the Johnnie Walker owner and is downbeat again for the most recent six months.
“For 1H, we expect organic revenue growth of -0.9% (Bloomberg consensus +0.9%) and organic operating profit growth of -5.4% (consensus -0.3%).
“We forecast adjusted operating profit of US$3,166 million and net profit of $2,073 million.
“We expect guidance to remain cautious for 2025 given ongoing soft-end market conditions despite improving execution.
“We also believe the company is likely to remove the 5-7% medium-term organic revenue growth guidance.
Sell is the rating with a target of 1,970p (2,020p)
Consensus for 2025 is 1.8% organic revenue growth and 0.6% organic operating profit growth.
UBS sits on the other side of the fence having recently double-upgraded Diageo to a buy.
The Swiss bank sees interim sales rising by 1.1% and underlying profits dipping by 1.4%.
UBS believes Diageo’s US Spirits business is significantly outperforming a still weak industry and that the strong growth momentum behind key brands Don Julio and Crown Royal can be sustained.