Prevailing negative sentiment towards alcoholic drinks companies reflects tariff and regulation risk, the fact drinkers’ disposable incomes are under pressure and the younger demographic is quaffing less alcohol, as well as worries over the demand impact of weight loss drugs on the sector.

Little wonder then that global beverages behemoth Diageo’s (DGE) shares have underperformed the FTSE 100 over one and five years amid a cycle of downgrades driven by a post-pandemic slowdown in spirits and some self-inflicted issues, including problems with excess stock in Latin America.

As such, the Johnnie Walker whisky-to-Smirnoff vodka maker’s under-fire chief executive Debra Crew will need to reassure investors Diageo remains a growth company able to gain global market share when the company serves up first-half figures on 4 February.

Following a tough few years, Warren Buffett-backed Diageo has recruited a new heavyweight CFO in Nik Jhangiani, who Jefferies believes will bring a renewed focus on growth, profit and cash.

There was a rumour late last week the firm was planning to sell off its Guinness unit as part of this focus, but it was quickly rebuffed.

On results day, Jefferies thinks Diageo could provide ‘a new guidance framework of 3% to 6% organic sales and 4% to 8% organic EBIT (earnings before interest and tax) growth, with an emphasis on stronger returns, effective from full-year 2027. 

‘This provides a cushion to absorb potential volatility around possible tariffs under Trump 2.0 and to build in full-year 2026 as a recovery year to rebuild credibility before hitting full stride.’ 

UK UPDATES OVER THE NEXT 7 DAYS

FULL-YEAR RESULTS

4 Feb: Crest Nicholson

5 Feb: GSK

6 Feb: AstraZeneca

FIRST-HALF RESULTS

4 Feb: Diageo, Filtronic, NWF Group

5 Feb: Made Tech

TRADING ANNOUNCEMENTS

4 Feb: Entain, Vodafone

5 Feb: DCC, SSE

6 Feb: Compass

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