DEO trades in a confirmed downtrend following a death cross signal — despite screening attractively at a forward price-to-earnings ratio of 12.6 times with a PEG ratio of 0.78, the combination of consecutive earnings misses, a free cash flow shortfall at only 40% of reported net income, and leverage at 1.8 times debt-to-equity warrants reducing exposure until both the technical and fundamental picture stabilize.
Thesis pillars
- Fcf Quality Red Flag→Stable
- Confirmed Downtrend Death Cross→Stable
- Earnings Miss Streak↓Deteriorating
- +1 more pillar — see the Why tab for full reasoning
Diageo plc (DEO) Stock Analysis
Range Bound setup
Consumer Defensive · Beverages - Wineries & Distilleries
Sell if holding. Momentum 4.1/10 is below the 5.0 floor at $86.89 — engine's falling-knife protection flags exit rather than catching a breakdown. Specifics: Leverage penalty (D/E 1.7): -1.0; Thin upside margin: 7.7%.
Diageo plc, together with its subsidiaries, engages in the production, marketing, and distribution of alcoholic beverages in North America, Europe, the Asia Pacific, Latin America and Caribbean, and Africa. It offers beer, scotch, gin, vodka, rum, liqueur, raki, wine, cachaça,... Read more
Sell if holding. Momentum 4.1/10 is below the 5.0 floor at $86.89 — engine's falling-knife protection flags exit rather than catching a breakdown. Specifics: Leverage penalty (D/E 1.7): -1.0; Thin upside margin: 7.7%. Chart setup: RSI 41 mid-range, Bollinger mid-band. Score 5.0/10, moderate confidence.
Passes 7/8 gates (favorable risk/reward ratio, clean insider activity, no SEC red flags, news events none recent, earnings proximity 132d clear, semi cycle peak clear, materials cycle peak clear). Fails on weak momentum. Suitability: moderate.
Recent developments
updated 2026-09-25Recent Developments — Diageo plc
Latest news
- NEWS WP Large Cap Income Plus Fund's Diageo PLC(DEO) Holding History - GuruFocus — GuruFocus neutral
- NEWS DEO Looks 31.2% Undervalued on GF Value™ Amid Dividend Sustainab - GuruFocus — GuruFocus positive
- NEWS Diageo falls after Deutsche Bank downgrade (DEO:NYSE) - Seeking Alpha — Seeking Alpha negative
- NEWS Diageo PLC (DEO) Stock Up 4.4% and Still Undervalued -- GF Score: 69/100 - GuruFocus — GuruFocus positive
- NEWS Bank of America Corp DE Purchases 103,531 Shares of Diageo plc $DEO - MarketBeat — MarketBeat neutral
Generated 2026-09-26T17:31:54Z.
Upcoming dated catalysts
Thesis
Key Metrics
Quality Signals
Options Flow
Model-generated analysis — not investment advice. Not a registered investment advisor. Past performance does not guarantee future results.
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Rating Breakdown
3 floor-breakers
Ranks in the bottom of its industry peers on the composite signal. Better names in the same sector exist.static
Revenue shrinking — -1.7% YoY. Growth thesis broken unless recovery story develops.static
No near-term catalyst priced in. Thesis progression will come from fundamentals grinding, not event reaction.static
Price Targets
Position Sizing
Risk Alerts
Earnings
Verdict History
Frequently Asked Questions
Sell if holding. Momentum 4.1/10 is below the 5.0 floor at $86.89 — engine's falling-knife protection flags exit rather than catching a breakdown. Specifics: Leverage penalty (D/E 1.7): -1.0; Thin upside margin: 7.7%. Chart setup: RSI 41 mid-range, Bollinger mid-band. Prior stop was $83.87. Score 5.0/10, moderate confidence.
Take-profit target: $93.59 (+7.7% upside). Prior stop was $83.87. Stop-loss: $83.87.
Thin upside margin: 7.7%; Leverage penalty (D/E 1.7): -1.0; Consecutive earnings misses (2).
Diageo plc trades at a P/E of 27.8 (forward 12.1). TrendMatrix value score: 7.6/10. Verdict: Sell.
32 analysts cover DEO with a consensus score of 3.9/5. Average price target: $108.
What does Diageo plc do?Diageo plc, together with its subsidiaries, engages in the production, marketing, and distribution of alcoholic...
Diageo plc, together with its subsidiaries, engages in the production, marketing, and distribution of alcoholic beverages in North America, Europe, the Asia Pacific, Latin America and Caribbean, and Africa. It offers beer, scotch, gin, vodka, rum, liqueur, raki, wine, cachaça, tequila, brandy, and Chinese white spirit beverages, as well as Irish, Canadian, Chinese US, and Indian whisky. The company also provides ready-to-drink and non-alcoholic beverages. Its principal brands include Johnnie Walker, Don Julio, Guinness, Crown Royal, Smirnoff, Baileys, Captain Morgan, Buchanan's, Casamigos, Shui Jing Fang, and McDowell's. The company was formerly known as Guinness plc and changed its name to Diageo plc in February 1998. The company was incorporated in 1886 and is headquartered in London, the United Kingdom.