Analysis - Diageo stays solid after North America boost
Diageo reported Q3 and YTD numbers earlier today
Diageo's prospects remain strong after a solid Q3 performance in North America and a better than expected showing in Western Europe, according to analysts.
The company today (18 April) reported a 4% rise in third-quarter group sales, helped by a 6% rise in North America, its biggest and most profitable market. However global volumes slipped by 1% in the quarter.
On North America, analysts Stifel said the performance is a sign that Diageo's volumes in the region are "improving" despite an accelerating price/mix.
"We reiterate our 'Buy' recommendation, seeing an attractive risk/reward from Diageo's long-term growth prospects and an attractive and improving outlook in North America," Stifel said in a note.
Analysts Investec said that the group's performance "under the hood" looked "solid", even though its Q3 had been slow.
"North America remains strong and the new Western Europe division wasn’t as bad as we were expecting," it said. "We think that Q3 is Diageo’s smallest quarter of the year at around 20% of sales, so its influence is small and phasing issues will have a disproportionate effect."
On future M&A prospects, Nomura said the group's strong balance sheet offered "further scope" for activity. Meanwhile it said the company still looks like to gain control of United Spirits "over time" even though "it looks unlikely that the tender offer will succeed at the price being offered".
Two entities expressed "serious interest" in buying collapsed wholesaler Waverley TBS after it called in administrators last year, it has emerged. ...
Diageo's renewed focus on its Don Julio Tequila brand in the US is producing solid growth in the on-trade, with opportunities to expand further, according to latest figures....
- Rekorderlig Deal Sees Molson Coors Miss Out
- Comment - Diageo CFO to North America? Do the Math
- 5 reasons why Constellation's Meiomi buy works
- Hail Marie Brizard: But, For How Long?
- Constellation Brands basks in beer glory
- Bacardi buys Banks rum
- Diageo ditches Shui Jing Fang plans in China
- Diageo turns to W Ice in South Korea
- MillerCoors changes CMOs with immediate effect
- C&C Group chairman backs CEO amid turmoil