British alcoholic drinks multinational Diageo remains confident on its medium-term outlook but has noted that near-term headwinds are more challenging, according to equities analysts at Barclays.
Trading activity is evolving in-line with company expectations, but Barclays has slightly trimmed full-year organic sales growth from 9.1% to 8.9%, with operating profit growth remaining at 9.5%.
“In aggregate, US trading remains resilient with tequila continuing to outperform, whilst APAC will likely benefit from China's sequential reopening through FY23E," said Barclays, adding: “LATAM growth continues to be dynamic but Diageo does highlight increasing inflationary pressures in both Europe and Africa.”
Barclays maintains an “overweight” rating for London-listed DGE shares with a target of 5,430p against the going rate of 3,649p.
Prior to Diageo’s annual general meeting today, chief executive officer Ivan Menezes said the group was still "well-positioned" to deliver its medium-term guidance of organic net sales growth “consistently” between 5% and 7% in the current year to June 2023 to the end of June 2025.