Diageo

DEO

Market cap $51B

Sin stocks stand out as resilient plays, blending stable demand, pricing power and strategic shifts that support long-term growth potential.

Diageo owns a strong portfolio of alcohol brands. The company's 200-plus brands generate $20 billion in annual revenue.

Our biggest source of underperformance was the consumer staples sector as we had a number of laggards, including Kerry Group, Philip Morris and Diageo. On the positive side, the three new purchases we made in Q2 during the post-Liberation Day market meltdown—Lam Research, ASML and Thermo Fisher Scientific—were each among our top contributors to returns in Q3. Our top contributor in Q3 was Alphabet, a long-time holding.

Post-Q3 and CEO transition, Diageo management is progressing well with self-help measures. DEO's new CEO brings a strong turnaround track record, emphasizing cost control, and brand building. The US and China remain soft in the near term, but Guinness capacity, RTD innovation, and more accessible price points underpin an expected H2 improvement.

The 2026 World Class U.S. program opens November 12, marking the start of a new chapter focused on education, community and the future of hospitality NEW YORK , Nov. 12, 2025 /PRNewswire/ -- For over a decade, World Class has celebrated the craft, creativity and excellence of bartenders across the nation, inspiring thousands of professionals to refine their skills, connect with peers and elevate the hospitality experience. This year marks the start of an exciting new chapter for the leading U.S. bartending program, with two trade industry leaders joining forces to launch Tales of the Cocktail Foundation Presents World Class Sponsored by DIAGEO.

Investors interested in stocks from the Beverages - Alcohol sector have probably already heard of Ambev (ABEV) and Diageo (DEO). But which of these two companies is the best option for those looking for undervalued stocks?

Diageo PLC (LSE:DGE) shares got a boost after naming Sir Dave Lewis as its next chief executive, with Citi analysts backing the appointment of a "well-known and well-respected executive in the consumer good industry". Analysts at the bank said the news deserved to be taken well, but that upside for the shares was likely to be capped, due to "debates around potential changes to future strategy, personnel and targets under Sir Dave".

Diageo's incoming CEO Dave Lewis, known in financial circles as “Drastic Dave” for his sweeping turnaround of businesses, will put his reputation as a cost-cutter to the test when he joins the world's largest spirits maker in January with the challenge of lowering its debt and reigniting sales.

Diageo remains a value trap, with persistent core issues and an unattractive risk/reward setup despite a prolonged bear market. Q1 2026 results disappointed again, showing flat organic sales, surprisingly weak pricing dynamics, and underperformance in the key markets China and the U.S. Management's cost-cutting and cash flow targets offer some positives, but their potential has limits while DEO's high valuation and debt remain concerning.

UK stocks jumped 1% on Monday, echoing an upbeat mood across global markets on signs that a historic U.S. government shutdown could be nearing its end, while Diageo surged after it appointed a former Tesco boss as its CEO.