Deutsche Bank has upgraded Diageo PLC (LSE:DGE) to 'hold' from 'sell', saying the stock is now “substantially de-risked” after a sharp decline.
The bank kept its price target at 2,020p, which suggests 6.5% downside from current levels.
Diageo shares have fallen 42% since Deutsche Bank’s downgrade in June 2022, significantly underperforming European and UK stock indices.
Analyst Mitch Collett acknowledged that Diageo remains one of the strongest names in the consumer staples sector. However, he warned that short-term risks and structural challenges continue to weigh on the stock.
Diageo, the maker of Johnnie Walker and Guinness, has faced pressure from slowing demand in key markets, inflation, and weaker consumer spending.
While Deutsche Bank no longer sees the stock as a sell, it isn’t calling it a buy either.
The shares were unchanged at 2,163p.