Diageo upgraded to Buy from Neutral at Citi

Citi analyst Simon Hales upgraded Diageo to Buy from Neutral with a price target of 3,000 GBp, up from 2,825 GBp. The firm says persistent earnings estimate downgrades and concerns that the business model is structurally broken has driven Diageo’s relative valuation “to long-run lows.” However, with earnings and valuations metrics “troughing,” and destocking headwinds likely to give way to positive earnings momentum in fiscal 2025, “an inflection point has been reached,” the analyst tells investors in a research note. Citi says the company’s fiscal 2024 results in July should serve as a “clearing event which allows investors to revisit what remains an attractive compounding growth story.”